Supreme Court asks Centre to consider allowing iron ore exports from Karnataka mines

The Supreme Court on Wednesday asked the Centre to clarify its stand on the export of extracted iron from Karnataka to rescue the mining industry which is under stress.

A bench led by Chief Justice N V Ramana asked Solicitor General Tushar Mehta to seek instructions on the issue, including whether it can do away with the e-auction process, and file its response by April 8. The apex court also suggested that public sector undertakings can step in and purchase the unsold stock at the market rate and then supply it to other domestic companies.

“Let us first clear the ground, then we will see what to do. By virtue of export, the state government and development fund may get some money…there is no point in keeping the extracted iron ore on the ground and it should be either used or sold or taken off the ground,” said the Bench.

The Supreme Court had in 2012 banned the export of iron ore pellets from Karnataka to check environmental damage in the state.

The top court also directed the court-appointed Central Empowered Committee (CEC), represented by senior counsel A D N Rao and also the monitoring committee to submit the status report and give details on the approximate quantity of iron ore available on the ground.

The bench also issued notice to the Karnataka government and others on a plea by the Federation of Indian Mineral Industries, Southern Chapter, for doing away with e-auction norms for mining leases situated in the districts of Ballari, Tumakuru and Chitradurga districts.

The apex court was hearing a batch of applications by mining companies and their associations seeking resumption of iron ore exports from Karnataka.

Stating that a dual regime was not required in Karnataka vis-a-vis the rest of the country, the industry body pointed out in Odisha, lessees have access to an open market and are not constrained to sell the ore by e-auction to a closed group of buyers, and can even export the ore. However, leaseholders in Karnataka were not granted similar relaxation. It asked the top court to discontinue the e-auction mandated through a judgement in 2013 for the sale and purchase of iron ore in Karnataka.

Pointing out that the CEC and the monitoring committee too had agreed that e-auction was no longer required, it further added that the committee in its 2019 report said the sale of iron ore via e-auction had no nexus with environmental damage.

While private miners had sought lifting of the ban on iron ore exports, the CEC had ruled out any possibility of allowing the export of iron ore pellets from Karnataka.

Various miners led by senior counsel Kapil Sibal, AM Singhvi, Mukul Rohatgi, Dushyant Dave and others told the SC that the price their iron ore is fetching while being sold through e-auction, the mode of sale allowed by the CEC, is three times lower than what it would have fetched if the raw material was exported.

Dave said that the miners were dying and facing closure due to their stocks not getting sold due to the ban on export in Karnataka while steel companies were importing iron ores and making huge profits. He argued that currently there is no government restriction on exports, and the CEC has written four reports that favour exports. Dave said “65,000 MT of iron ore is lying with miners unsold. While the miners are going through extreme stress the large steel producers are benefitting from low prices,” he said.

Singhvi contended that a large steel corporation is using its influence to keep the prices “suppressed”.