For the beleaguered steel and sponge iron manufacturers of Karnataka's Bellary district, the Supreme Court's decision on Thursday could not have been better. The court has paved the way both for
granting of fresh mining leases, as well as for opening up of more of the mines that had been suspended by its own order in July 11. The Court's action was in response to the large-scale illegalities it discovered in mining operations and exports.
The mines are classified into A, B and C categories. Those in the A category are those where there have been few or no illegalities committed during mining, while the ones in the C category are the ones where legal processes were flouted the most. The B ones fall in between.
Thursday's order allows 63 mines in the A and B categories to reopen. They can, however, do so subject to their complying with the stringent reclamation and rehabilitation (R&R) norms laid down by the court.
The case being heard in the Supreme Court is a public interest litigation filed by the Karnataka-based non-profit, Samaj Parivartana Samudaya, led by well-known activist S.R.Hiremath. The court is being assisted in the case by an independent committee called the Central Empowered Committee (CEC).
"The recommendations of the CEC contained in the Report dated 15.2.2013 for reopening of remaining Category "A" mines and Category "B" mines (63 in number) and sale of sub-grade iron ore subject to the conditions mentioned in the said report are approved," a three Judge bench of the Supreme Court, headed by Justice Aftab Alam, and comprising Justice K. S. Radhakrishnan and Justice Ranjan Gogoi said in an 81-page order.
On September 3 last year, the Supreme Court had allowed 18 mines in the A category to resume operations. But A category mines can start mining only if they meet 80 per cent of the R&R conditions.
"The recommendations of the CEC contained in the Report dated 15.2.2013 for reopening of remaining Category "A" mines and Category "B" mines and sale of sub-grade iron ore subject to the conditions mentioned in the said report are approved," the order said.
The order further adds: "…This Court's order dated 02.11.2012 placing an embargo on grant of fresh mining leases need not be continued any further. Grant of fresh mining leases and consideration of pending applications (should) be dealt with in accordance with law, the directions contained in the present order as well as the spirit thereof."
While imposing the ban, the Supreme Court had, however, permitted state-owned NMDC Ltd, to continue mining and selling up to 12 million tonnes per annum to local industries. NMDC, however, has not been able to mine up to one million tonnes a month affecting the availability of ore. With four of A category mines working, the monthly availability of ore is about 2 million tonnes, according to Bellary industry sources.
JSW Steel Ltd is the largest steel maker in Bellary district with an annual capacity of 10 million tonnes, followed by Kalyani Steels, Mukund Steels and BMM Ispat, all with two million tonnes each. Together with the sponge iron manufacturers, the local industry requires about four million tonnes of ore a month to operate at full capacity, say local steel industry executives.
According to JSW Steel's Joint MD M.V.S. Seshagiri Rao, the opening up of mining will enable raw material linkages for further investments in the steel sector in Karnataka. "This relief not only provides a breather to the steel industry in the region but also assists in providing of direct and indirect employment and livelihood for several people employed in this sector at a time when the steel industry was at the brink of closure due to non-availability of iron ore," he said in a statement.
The actual availability of iron ore, however, will depend on the willingness of the mining lease holders to implement the R&R measures, and then resume mining.
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