IRON ORE VIOLATIONS 

Context

Key points

• Supreme Court said that the conservation of ecology and environment must go hand with the spirit of economic development.
• Earlier, on May 20, 2022, the Apex court had relaxed the ban on sale outside the State and export of already excavated iron ore from mines in these three districts.
• Ten years after it clamped down on the production and sale of iron ore in Karnataka, the Court relaxed its orders.

Gali Janardhan Reddy

• Karnataka's mining story is closely linked to the notorious Reddy brothers of Ballari.
• In 2002, Gali Janardhan Reddy incorporated the Obulapuram Mining Company (OMC) in Andhra Pradesh's Anantapur district.
• Eight years later, in 2010, the court shut it down, after a CBI probe was initiated against Mr Reddy in 2009 for illegal mining.

Lokayukta Reports 

• The two Lokayukta Reports of 2008 and 2011 exposed over 700 government officials in the mining scandal, including three Chief Ministers, laying bare the nexus between the political class and the mining and steel industries.
• After the Court-appointed Central Empowered Committee (CEC) report brought to light accounts of rampant violations, the apex court passed an order on September 23, 2011, to stop mining operations in Ballari.

Court's directions 

• Following the ban, the Court directed the Indian Council of Forestry Research and Education (ICFRE) to draw up a reclamation and rehabilitation plan to reverse the environmental damage caused by illegal mining.
• A year later, in September 2012, the SC allowed 18 "category A" mines to resume operations and the ore was sold through e-auctions. 
• In December 2017, the Court permitted increasing the cumulative ceiling cap to 35 MMT based on a CEC report.

Issues resurfaced 

• In May The Federation of Indian Mineral Industries, Southern Chapter includes Vedanta Limited had asked the SC to scrap e-auction norms in the export or sale of iron ore for mining lessees in the state.
• The mining firms claimed that they were facing closure as steel plants and other related industries were not willing to purchase stocks in the e-auction or above the prevailing market price.
• The Union Ministries of  Steel and Mines supported this application by mining firms.
• The CEC also gave in, adding that the demand and supply and price of iron ore are best left to be determined by market forces.
• As opposed to 2017, when Karnataka was in support of a gradual increase in the ceiling limit, the Basavaraj Bommai-led government has changed its stance and is now in favour of the complete removal of the ceiling limit.
• It has opposed the lifting of the decade-old ban on iron ore export from the State.

Supreme Court Rule

• Through its two orders this year, the top Court ruled that it was necessary to create a level playing field for the mines situated in the three districts with those in the rest of the country.
• Taking cognisance of the course correction by the government, it relaxed its 2011 order since the situation had now "changed for the better".
• The Court has reserved its judgment on the complete removal of ceiling limits on iron ore mining.

Implications 

• India's efforts to clean up illegal mining and export of iron ore left steel producers in the lurch after 2011.
• With the closure of mines, steel mills faced raw material shortages forcing them to import, thereby opening up the country to business for iron ore giants from outside India.

• The restrictions on production and sale had also affected lakhs of mining dependants in Karnataka making their livelihood uncertain. The Court order may offer them some respite.