April 13, 2012 / 9:28 AM / in 7 years

SC wants land clean-up in Karnataka iron ore case

NEW DELHI (Reuters) - The Supreme Court has asked companies in Karnataka to push on with land clean-up before it removes a mining ban and set April 20 as the next date for reviewing progress, Justice S.H. Kapadia said on Friday.

A view of the Supreme Court building is seen in New Delhi December 7, 2010. REUTERS/B Mathur/Files

His decision leaves state-run NMDC (NMDC.NS) as the only company able to mine in the southern state, which used to account for about 15 percent of India’s annual production and contribute about 25 percent of exports.

India used to export half its iron ore output — about 100 million tonnes a year — making it the third-largest exporter in the world. But its overseas sales have slumped as New Delhi and state governments clamp down on illegal mining.

In 2011, the Supreme Court banned iron ore mining in three districts of Karnataka citing environmental concerns, and asked a federal government body to carry out an environmental impact assessment.

It later allowed NMDC to mine up to one million tonnes per month from its captive mines in the state, but other players remain unable to produce.

It has deferred a decision on lifting the remaining ban several times.

The top court told mining companies to push ahead with land reclamation and repair, saying the environment in the three districts needed to be improved before the ban could be lifted, said Dhiraj Kumar, one of the lawyers who represent Mineral Enterprise Ltd, one of the miners appealing the ban.

The court has yet to approve other recommendations made by the government body assessing environmental impact and wants a discussion again on April 20.

An industry body official said removal of the ban could still take at least three months.

“It’s a Herculean task... Once (the clean-up) plan is implemented they (the Supreme Court) may allow them to open mines,” said Basant Poddar, vice-chairman of the Federation of Indian Mineral Industries (FIMI).

He said it would take at least 1-2 years for normal mining to return.

While iron ore mining remains partially banned in Karnataka, exports of the steel-making material have yet to resume from the state, despite removal of a ban on movement of the commodity by the Supreme Court last year.

The Karnataka government had imposed that ban in July 2010.

The Indian government is against any ban on iron ore exports to curb illegal mining and prefers to encourage supplies to go first to domestic users like JSW Steel (JSTL.NS).

Reporting by Suchitra Mohanty and Siddesh Mayenkar; Editing by Jo Winterbottom

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