The Supreme Court on Friday suspended all mining operations in the Bellary district of Karnataka with immediate effect, a day after state Lokayukta Santosh Hegde submitted a damning report that has forced the state chief minister BS Yeddyurappa to resign.
The court also directed the environment ministry to issue an interim report on the country?s iron ore requirement for the steel industry, the percentage of the requirement met by the Bellary mines and the quantum of ore used for domestic purposes and exports. Of the total iron ore mined in the country, about 35% is sourced from Karnataka.
The special forest bench headed by chief justice SH Kapadia sought a report from the ministry in a week after the court-appointed central empowered committee more or less endorsed the Hegde report.
Mining in the state has already slowed considerably, with miners operating at less than 30% of their capacity. Private mines were supplying small quantities of lumps and fine ore to local steel mills, but the operations had substantially reduced since mining illegalities started hitting national headlines.
? We are of the view that mining operations in areas of 10,868 hectares in Bellary should be suspended till further orders,? the court said. While expressing shock over the extent of the environmental damage in the area, the court observed that ?the greed of a few is making everyone suffer.?
It also asked the Karnataka government to take responsibility for restoring the ecological balance by asking miners to pay for the clean-up. A source associated with mining companies claimed the stoppage will cut back about R20,000 crore the state earned from levies and taxes on the mines. The Hegde report said the mining scam has caused R16,085 crore losses to the state.
The apex court?s questions are similar to those raised by Hegde, whose report said politicians like BS Yeddyurappa have colluded with mining companies to sanction violations. Hegde has also listed several mining companies who illegally transport massive amounts of iron ore for export. Three Jindal group companies, the state-owned National Mining Development Corporation (NMDC) and Gujarat-based energy and infrastructure giant Adani Group have been named in alleged irregularities and involvement in illegal mining.
Bellary has 148 mines, of which 98 are located in forest areas and are at the centre of the controversy over environmental problems in the area. At least 40 leases for mining in forests had been declared void a few months ago.
State-owned NMDC is largely dependent on long-term commitments to large steel mills for lump supplies. However, a good bit of its export commitment is met through mines in other states. Hence, the company may not face large scale issues, even after mining in Karnataka is stopped.
Obulapuram Mining Company (OMC), owned by the Reddy brothers, was one of the biggest mining beneficiaries in the region. According to the Lokayukta report, OMC was involved in multi-crore illegal transactions and tax evasion through illegal mining in the Bellary-Sandur-Hospet region.
The report had said that at least 29 million metric tonnes of illicit iron ore had been exported during 2006-2010 from Karnataka.
The report defined illicit ore as any any iron ore extracted beyond permitted quantity in the mining plan.
Ore transported without transit permits or non-payment of royalty is illegal, the report said.
The miners were hoping to clear their existing stock piles after the SC earlier lifted the export ban in Karnataka. However, exports had not picked up since the state government had not put up the required infrastructure.
The Friday?s decision banning mining will now seal it for companies thriving on the natural riches of dusty Bellary. The law has lowered the iron curtains on the mining barons.