The Supreme Court on Thursday eased some curbs on mining iron ore in Karnataka, providing partial relief to miners as well as the steel industry, but in a separate judgment retained the ban on mining bauxite in Orissa, dealing a setback for the state government and Anil Agarwal?s Vedanta Group. In December, Vedanta had to shut down its alumina refinery in the Niyamgiri-Lanjigarh region.
The apex court, which had allowed 18 category A mines (the ones with none or least illegalities) to resume mining in September 2012, on Thursday added around 90 mines falling in categories A and B to resume mining activities. However, it cancelled 49 mining leases in category C, those with maximum illegalities. The court?s order is largely based on the recommendations of the Central Empowered Committee appointed by it.
While the resumption of mining in Karnataka would provide some relief from the next fiscal to the steel industry reeling under shortfall of the crucial raw material, there would still be no ore exports, as the state government has not issued transport permits. Among steel firms, JSW Steel and Kalyani Steel stand to gain the most as they do not have captive iron ore mines like state-owned Steel Authority of India and Tata Steel.
Seshagiri Rao, joint MD of JSW Steel, welcomed the court?s ruling. ?JSW Steel welcomes the honourable Supreme Court?s judgment which will open up balance category A and B mines in Karnataka region and will have a positive impact on the steel sector and the Indian economy,? he said.
Kalyani Steel closed 15.30% higher on the BSE at R42.20, Sandur Manganese 0.32% higher at R328.60 and Sesa Goa 0.87% higher at R150.65. JSW Steel?s shares closed 2.18% lower at R716.90, before touching the day?s high of R738.
India used to be the world?s third-biggest exporter of iron ore, shipping almost half of its annual output of around 200 million tonnes, mostly to China. A 2010 ban to check illegal mining saw exports falling to just over 30 million tonnes last year. Karnataka was the country?s second-biggest ore producer before the ban, at about 45 million to 50 million tonne.
Meanwhile, the other order relating to the continuation of ban on bauxite mining would need the Orissa government?s Orissa Mining Corporation (OMC) to seek the approval of gram sabhas in the Kalahandi and Rayagda district. The local tribes had objected to the mining on cultural and religious grounds. This would delay the resumption of the 1 million tonne alumina refinery of Vedanta Aluminium, which has been shut since December due to lack of supply of bauxite which is a key raw material. VAL has a sale purchase agreement with OMC, which has a lease to mine bauxite in the region. Vedanta officials, however, exuded confidence on getting the gram sabha approval, with the apex court laying down a process for obtaining forest clearance in a time-bound manner.
The court directed the gram sabhas of the two districts ? Kalahandi and Rayagada ? to decide in three months the issues arising out of the mining project, including that of the tribals residing in the area. It also directed the ministry of environment and forests to take action in two months after a report from the gram sabhas is received.
The court gave the directions on the petition moved by OMC which had challenged the MoEF decision to cancel the environmental clearance granted to the Niyamgiri bauxite mining project.
The ministry had also refused the next stage forest clearance to OMC and Vedanta?s mining project in Niyamgiri hills area in Lanjigarh, Kalahandi and Rayagada districts, accepting the Forest Advisory Committee?s recommendation to withdraw the clearance.