Central Supreme Court Eases Restrictions on Sale of Mined Iron Ore in Karnataka

The Supreme Court, on Friday, eased restrictions on the sale of iron ore mined in Karnataka. It allowed the direct sale of “already excavated stock” without the need for e-auction, as previously ordered in 2011. The court also permitted the export of the iron ore.

In response to requests from mine operators to modify the September 23, 2011, order, a three-judge panel led by Chief Justice of India N V Ramana agreed with the Ministry of Steel, Union of India, and Ministry of Mines. They emphasized the need for a level playing field for mines in Bellary, Chitradurga, and Tumkur districts compared to those in other parts of the country.

The bench, which included Justices Krishna Murari and Hima Kohli, supported the Central Empowered Committee’s view that market forces should determine the demand, supply, and price of iron ore. They suggested a review of the system put in place over a decade ago to halt excessive iron ore excavation in the Karnataka districts.

The court acknowledged that the e-auction system for iron ore disposal has been successful since 2011 but noted improvements in the region. As a result, they decided to relax the September 23, 2011, order.

The bench highlighted that consecutive e-auctions had poor responses and low iron ore sales, suggesting the need to remove restrictions on sale methods and price fixation.

Considering all factors, the court granted permission for direct sale of excavated iron ore without e-auction, allowing interstate sales and exports under government policy. However, they sought an opinion from the Oversight Authority before lifting the production ceiling for mining leases in the specified districts.

To gather inputs, including from stakeholders like the CEC and Monitoring Committee, the Authority was given four weeks to provide an opinion to the court.

Following reports of illegal mining, the SC had previously halted mining activities in Bellary, Tumkur, and Chitradurga, classifying the mines and imposing conditions. An order in 2011 directed iron ore disposal through e-auction and established a Special Purpose Vehicle for mitigation measures.