Iron Ore Mining and Supreme Court Judgement

• The Supreme Court recently increased the "ceiling limit" of iron ore mining for the Karnataka districts of Ballari, Chitradurga, and Tumakuru, stating that environmental protection and economic development must coexist.
• The Supreme Court has loosened its own directives ten years after strictly regulating the production and sale of iron ore in Karnataka.

About Karnataka Iron Ore Mining Ban

• After the Central Bureau of Investigation (CBI) opened an investigation into unlawful mining at the Obulapuram Mining Company (OMC) near Ballari in 2009, the company was shut down by the Supreme Court in 2010.
• The illicit mining caused significant losses to the exchequer, theft of public property, encroachment on forest land, environmental destruction, and widespread health problems among the local population.
• Over 700 government officials, including three chief ministers, were implicated in the unlawful mining affair in the two Lokayukta Reports from 2008 and 2011.

Supreme Court Directives:

• The Supreme Court issued a directive in 2011 to halt mining activities in Ballari after the Central Empowered Committee (CEC), which was formed by the SC, published a report on the widespread irregularities in the mining industry.
• As part of the idea of intergenerational equality, the SC also prohibited the export of iron ore pellets from Karnataka in order to stop environmental damage and conserve it for future generations.
• For mines in categories A and B, SC additionally set the maximum allowed yearly output limit at 35 MMT.
• In order to repair the environmental harm brought on by illicit mining, it instructed the Indian Council of Forestry Research and Education (ICFRE) to develop a reclamation and rehabilitation (R&R) plan.
• The SC approved the restart of 18 "category A" mines in 2012.
• Mines were divided into groups based on how much illicit activity they included.
• "Leases where no illegality or marginal illegality has been identified" are classified as "A Category Mines."
• Based on their different offences, mine with more significant transgressions fall under categories B and C.
• The ore was sold through online auctions after the mines were permitted to reopen.

The implication of Order:

• As a result of the mines' closure, steel mills were forced to buy raw materials from abroad, which allowed large international iron ore companies to do business in India.

• The price increases, e-auction restrictions, and other factors had a negative impact on thousands of Karnataka residents who depend on the mining industry for a living.

Recent Developments on the Issue

• Mining Firms Appeal: In May 2022, mining companies requested that the Supreme Court (SC) eliminate the e-auction requirements for the export or sale of iron ore to mining lessees in the Ballari, Tumakuru, and Chitradurga districts.
• They stated that their failure to sell their stocks had led to their impending closure.
• Position of the Karnataka Administration: The Karnataka government is in favour of completely eliminating the ceiling limit.

Original Petitioners' Position

• The initial petitioner opposed all exports, arguing that only finished steel should be exported because materials are valuable national resources that must be conserved.

Supreme Court Decision

• The Supreme Court increased the cap on mining for the following mines and allowed the state to resume exporting already-excavated iron ore through channels other than e-auction.
• 28 MMT to 35 MMT in Ballari
• Districts of Chitradurga and Tumakuru: 7 to 15 MMT
• The court determined that it was necessary to level the playing field between the miners located in the three districts and those located elsewhere in the nation.

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