The Supreme Court on Friday accepted the Central Empowered Committee report suggesting that 1.5 million tonnes of raw iron ore be sold every month through e-auction. This is from the stockpile of 25 million tonnes in Karnataka.

However, this quantity will not be exported. It is only to meet the requirements of the domestic steel industry. The CEC report said the lease-wise and/or grade-wise reserve price for iron will be fixed after taking into consideration the sale price obtained/ fixed by the state-owned NDMC. It said only steel and associated industries --wholly/partly dependent on iron ore from Karnataka for their own use-- can take part in the auction.

The court had banned iron ore mining in Karnataka’s Bellary, Tumkur and Chitradurga districts following the recommendation of the CEC, which detected illegal iron ore mining in these districts resulting in environmental damage. However, the court had noted that the stockpile of 25 million tonnes of iron ore could be released in a calibrated manner so that steelmakers are not starved of raw material. It had permitted NMDC to operate two of its mines in Bellary and produce one million tonne of iron ore a month to meet the steel industry’s requirements.

The court had directed the Karnataka Government to charge royalty at 10 per cent of the current market value of iron ore and asked NMDC to maintain an account of such amount paid. The Karnataka Government has been charging a royalty of 10 per cent on the rate fixed by the Indian Bureau of Mines at the pit-head, which is much lower than the market value. The court said the State Government will have to deploy the higher income earned from royalty (which is the difference between the 10 per cent of market value of iron ore and the Indian Bureau of Mines rate) for rehabilitation of the mined area.

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