Iron ore, the backbone of the steel industry, is a major contributor to India’s economic development. The Supreme Court has recently amended its decade-old ceiling limit on iron ore mining in Ballari, Chitradurga, and Tumakuru districts in Karnataka, citing that ecological conservation must go hand in hand with economic growth. This article dives deep into the background, implications, and recent developments about Karnataka’s iron ore mining ban.
Background: The Shutdown of Obulapuram Mining Company
In 2010, the Supreme Court ceased the Obulapuram Mining Company’s operations in Ballari due to illegal mining activities detected in 2009. This illicit activity resulted in public wealth plunder, massive losses to the exchequer, land encroachment in forests, environmental damages, and significant health issues among the local populace. Two Lokayukta Reports of 2008 and 2011 exposed over 700 government officials, including three chief ministers, involved in this illegal mining scandal.
Supreme Court’s Orders and Their Implication
The Supreme Court, in response to the Central Empowered Committee’s report highlighting rampant mining violations, passed an order in 2011, halting mining operations in Ballari. Simultaneously banning the export of iron ore pellets from Karnataka, the court sought to protect the environment and preserve resources for future generations. Mines were then categorized on the basis of illegality, resulting in A, B, and C category mines, each with varying degrees of infractions.
Closure of mines led steel mills to grapple with raw material shortages, forcing them to import from outside India. This situation invited global iron ore giants to the Indian business terrain. Additionally, lakhs of mining dependents in Karnataka faced an uncertain livelihood due to production, e-auction, and price restrictions.
Recent Developments: The Appeal of Mining Firms and the Supreme Court’s Ruling
In May 2022, mining firms appealed to the Supreme Court to eliminate e-auction norms for mining lessees in Ballari, Tumakuru, and Chitradurga districts. The firms claimed they were on the brink of closure due to unsold stocks. However, the Karnataka government stood for completely removing the ceiling limit. Conversely, the original petitioner fought against any exports, arguing that minerals are national assets that should be conserved.
The Supreme Court eventually allowed exports of already excavated iron ore from the state through modes other than e-auction. It also raised the ceiling limit on mining for mines located in Ballari, Chitradurga, and Tumakuru districts.
E-Auction in Iron Ore Mining
An e-auction is an electronic transaction between auctioneers (sellers) and suppliers (bidders), occurring on an online marketplace. After each bid, a Supreme Court-appointed monitoring committee publishes a document detailing the iron ore quality, the owning mine, the number of bidders, and the final takers. Registered buyers can view forthcoming auctions and bid on them. The sellers, who own legal iron ore mines, specify the ore quality, type, and floor price for the bidding. Buyers are typically steel manufacturers.
UPSC Civil Services Examination, Previous Year Questions
The examined topics included the power of State Governments to auction non-coal mines, the existence of gold mines in Andhra Pradesh and Jharkhand, and iron ore mines in Rajasthan. Students were tested on their understanding of the Mines and Minerals (Development and Regulation) Act, 2015, which regiments the Indian mining segment, and the specifics of obtaining and granting mining operation leases.