The Supreme Court on Friday extended the ban on iron ore mining to two more districts of Karnataka - Tumkur and Chitradurga. These districts produce about 10 million tonnes -- about a quarter of the state’s output.

The ban follows the recommendation of the Central Empowered Committee (CEC), which detected illegal iron ore mining in these districts resulting in environmental damage. “We have to balance the economic development and environmental concerns,” a three-judge forest bench headed by the Chief Justice Mr S H Kapadia said.

The apex court had on July 29 banned mining in Bellary, the iron ore hub where illegal mining was found to be rampant.

However, the court noted that a stockpile of 25 million tonnes of iron ore could be released in a calibrated fashion so that the steel makers are not starved of raw material. It asked the steel industry to give inputs to the CEC within two days regarding their domestic requirement so that the Attorney General Mr G E Vahanvati and Amicus Curiae Mr Shyam Divan can submit the same -- including the modalities of sale and transportation of the stockpile -- to the court by September 2, the next date of hearing.

The CEC has been asked to submit on September 2 the name of the government agency that would be in charge of sale of existing stock and keeping the accounts of the sale proceeds including royalty.

The court also sought the rehabilitation and reclamation plan of Tumkur and Chitradurga along with Bellary. It asked all the mining firms to set up an association and give inputs on scientific mining to prevent further environmental damage.

Following the apex court decision, stocks of Sesa Goa and JSW Steel hit a yearly low on the BSE. Sesa Goa, which operates A Narrain mine in Chitradurga, touched a yearly low of Rs 200.70 on Friday before recovering marginally to close at Rs 203.80, a decline of 6.3 per cent. The A Narrain mines account for close to 15 per cent of Sesa Goa’s volumes.

Similarly, JSW Steel which has been sourcing iron ore from Chitradurga and Tumkur districts, in the aftermath of mining suspension in Bellary, to meet its requirement also hit a yearly low at Rs 594.65 before recovering marginally to close at Rs 608 on the BSE.

Meanwhile, the court also said that the macro-level Environment Impact Assessment (EIA) being done in Bellary by the Indian Council of Forestry Research and Education should cover Tumkur and Chitradurga too. It was suggested to the court that MMTC and MSTC could be allowed to sell the accumulated iron ore stock pile.

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