Supreme Court Lifts Curbs On Iron Ore Sale From Mines In Karnataka; Allows Export

The Supreme Court on Friday lifted the curbs on sale of iron ore sale in Karnataka and allowed the export of the ore subject to the terms and conditions of the Government of India.

The Court allowed the mine operators to sell the already excavated iron ore by entering into direct contracts without resorting to e-auction.

A Bench comprising the Chief Justice of India NV Ramana, Justice Krishna Murari and Justice Hima Kohli passed the order on a batch of applications filed by mine operators seeking the lifting of restrictions on sale and export of iron ore from Karnataka,  imposed in 2011 after finding rampant violations.

CJI Ramana dictated the operative portion of the order as follows.

"We are in broad agreement with the stand taken by the Ministry of Steel, Union of India and Ministry of Mines that it is necessary to create a level playing field for the mines situated in the districts of Bellary, Chitradurga and Tumkur with others situated in the rest of the country. As the CEC has indicated, the demand/supply and price of iron ore are best left to be determined by the market forces. This Court is of the opinion that the time has come to review the system that was put in place over a decade ago, on halting the unchecked excavation of iron ore in the three prime Districts in the State of Karnataka. Ever since then, e-auction has been the only mode available for disposal of the excavated iron ore. The said arrangement has worked out satisfactorily so far. The situation that was prevalent in the region prior to the year 2011, has now changed for the better. Having regard to the course correction that has taken place, the regeneration post the ruinous damage caused to the environment and the various steps taken by the Government, we are of the opinion that the order passed on 23rd September, 2011 deserves to be relaxed. Additionally, it is a matter of record that consecutive e-auctions conducted by the Monitoring Committee have been receiving a poor response and sale of iron ore even at the reserve price is dismally low. Looking at the overall change in the outlook, the restrictions placed on the manner of conducting the sale of iron ore and fixation of the sale price need to be removed.

Keeping in mind all the aforesaid factors, we are inclined to favourably consider the prayer made by the applicants and grant them permission to sell the already excavated iron ore stock-pile at various mines and stock yards located in the Districts of Bellary, Tumkur and Chitradurga in the State of Karnataka, without having to resort to the process of e-auction. Permission is granted to the applicants to enter into direct contracts to lift the excavated iron ore through inter State sales. We also grant permission to the applicants to export the iron ore and pellets manufactured from the iron ore produced from the mines situated in the State of Karnataka, to countries abroad, as is being done in the rest of the country, but strictly in terms of the extant policy of the Government of India.".

Case Title : Samaj Parivarthana Samudaya versus State of Karnataka and others

Citation : 2022 LiveLaw (SC) 509

Mines and Minerals (Development and Regulation) Act 1957 - Supreme Court lifts curbs on iron sale and export from mines in Karnataka- Relaxes the directions issued in 2011

Click here to read/download the order