Supreme Court permits NMDC to start mining in Bellary

Friday, Aug 05,

The Supreme Court (SC) has permitted NMDC to carry out mining activities in Bellary and produce one million tonne iron ore a month to meet domestic requirements of the steel industry. However, neither mining by private companies nor export of iron ore is allowed from the region.

The decision comes in line with the recent vote conducted by SteelMint under the heading “Will Supreme Court reconsider the ban on mining activities in Bellary?” 48% of the participants believed the ban will be lifted partially considering the iron ore requirement of the domestic steel industry.

The court has directed the Karnataka Government to charge royalty on the basis of 10 per cent of current market value of iron ore which is different from what the state Government was charging previously.

Karnataka Government has been charging royalty of only 10 per cent of the rate fixed by the Indian Bureau of Mines (IBM) at the pit head, which is much lower than the market value. So, now the Karnataka Government will have to deploy the higher income earned from royalty for rehabilitation of the mined area, the court said.

The court has also asked for a macro-level environment impact assessment of the region from the Indian Council of Forestry Research and Education within three weeks of time.

The announcement of the ban last Friday came at the time when steel mills were already facing the dearth of iron ore supply. Most of the steel mills were either forced to decrease their production level or were on the verge of shutting after the ban as inventory level for iron ore was very low.

The decision made by the Supreme Court will benefit only major steel companies like JSW, which had shut down 2 of its furnaces after the announcement of the ban made last Friday. Smaller companies may still have to feel the pinch of unavailability of iron ore until mining activities resume entirely in Bellary and till then they have to procure iron ore from the neighboring districts of Tumkur and Chitradurga.

Reported by: Monica Patnaik (monica.patnaik@steelmint.com)