Apex court relaxes its 2011 order: Operators can sell directly already mined iron ore in Karnataka, says SC

Allowing the request by mine operators to modify its September 23, 2011, order, a three-judge presided by Chief Justice of India N V Ramana said, “We are in broad agreement with the stand taken by the Ministry of Steel, Union of India and Ministry of Mines that it is necessary to create a level-playing field for the mines situated in the districts of Bellary, Chitradurga and Tumkur with others situated in the rest of the country.”

The bench, also comprising Justices Krishna Murari and Hima Kohli, agreed with the opinion of the court-appointed Central Empowered Committee (CEC) that “the demand/supply and price of iron ore are best left to be determined by the market forces” and said “time has come to review the system that was put in place over a decade ago, on halting the unchecked excavation of iron ore in the three prime Karnataka districts”.

The court said that after the 2011 order, “e-auction has been the only mode available for disposal of the excavated iron ore. The said arrangement has worked out satisfactorily so far. The situation that was prevalent in the region prior to the year 2011, has now changed for the better. Having regard to the course correction that has taken place, the regeneration post the ruinous damage caused to the environment and the various steps taken by the government, we are of the opinion that the order passed on September 23, 2011, deserves to be relaxed”.

The bench also pointed out that it is also a “matter of record that consecutive e-auctions conducted by the Monitoring Committee have been receiving a poor response and the sale of iron ore even at the reserve price is dismally low. Looking at the overall change in the outlook, the restrictions placed on the manner of conducting the sale of iron ore and fixation of the sale price need to be removed”.

“Keeping in mind all the aforesaid factors, we are inclined to favourably consider the prayer made by the applicants and grant them permission to sell the already excavated iron ore stock-pile at various mines and stockyards located in the districts of Bellary, Tumkur and Chitradurga in the state of Karnataka, without having to resort to the process of e-auction. Permission is granted to the applicants to enter into direct contracts to lift the excavated iron ore through inter-state sales. We also grant permission to the applicants to export abroad the iron ore and pellets manufactured from it…as is being done in the rest of the country, but strictly in terms of the extant policy of the government of India,” ruled the bench.

On the request to lift the ceiling limit for production of iron ore for mining leases in the above-mentioned districts, the court, however, said: “We are of the considered opinion that it would be expedient to obtain an opinion from the Oversight Authority appointed by it by order dated April 21, 2022, about the same before deciding the said issue.”

It asked the Authority “to take inputs from the stakeholders, including the CEC and the Monitoring Committee, and to send” the “opinion” to the court “preferably within a period of four weeks”.

Acting on reports of rampant illegal mining, the SC had on July 29, 2011, prohibited all mining activity in Bellary, followed by Tumkur and Chitradurga. Subsequently, the mines were classified in A, B and C categories and conditions imposed on their activities. By an order dated September 23, 2011, the court directed disposal of the accumulated iron ore through e-auction conducted by the Monitoring Committee and also constituted a ‘Special Purpose Vehicle’ to take mitigating measures.