SC allows 18 more Karnataka mines to resume operations

Embargo on grant of mining leases also lifted; steel mills see significant boost in ore output

In a significant relief to iron ore miners and steel producers, the Supreme Court today allowed 18 more Karnataka mines to resume operations, while it cancelled the leases of 49 illegal ones.

With this, the number of mining companies — from both Category A and B — in business in the states has come down to 117. Though the cancellation of licences would largely impact companies like S B Minerals and H G Rangangouda, controlled by politicians, the steel industry could look at a production of 15-17 mt iron ore from the state this year, assuming NMDC produces about 8 mt. Normalisation of operations of steel companies like JSW Steel, Kalyani Steel, BMM Ispat, could, however, take some time. These mills currently produce at only 50 per cent and 80 per cent of their respective capacities.

The court also lifted the embargo on grant of fresh mining leases which could help many companies get their leases renewed. Grant of new leases and consideration of pending applications would be dealt with according to law and directions in the present judgment, the court said.

Today’s order has largely followed the recommendations of the Central Empowered Committee (CEC), which classified mines into three categories on the basis of the extent of their illegal operations. In Category A are those companies whose operations were not illegal. The 18 mines allowed to operate are under this category.

Another 63 that were allowed to function under the strict conditions laid down by the CEC, after minor violations were found, fall under Category B.

Ban continues on Category C mines since their operations were found to be completely illegal. The proceeds from sale of mines in this category through a monitoring committee will stand forfeited to the state. The committee will remit the amounts held by it to a special purpose vehicle for restoration and rehabilitation in the ecologically damaged area.

The apex court Bench, headed by judge Aftab Alam, also suspended mining operations on the Karnataka-Andhra Pradesh border till the boundary was demarcated under the auspices of the Surveyor General of India. This is because the area where mining is done is claimed by both the states and illegal exports are made from there towards eastern ports.

The court had clamped a total ban on mining in 2011 following allegations of corruption and environmental damage. It had set up a CEC which studied the situation on the spot and reported to the court.

JSW Steel Director & CEO Vinod Nowal said the verdict would lead to normalisation of mining operations. “The uncertainty is over for us. We hope to get 20-21 mt iron ore by the end of this year. As far as JSW Steel is concerned, we will achieve 90 per cent capacity utilisation this financial year.”