Supreme Court allows reopening of 90 more mines in Karnataka subject to conditions

Leases of 51 mines cancelled; embargo on new leases lifted

By M Suchitra
Published: Monday 22 April 2013

The apex court has put a ceiling on the total production of iron ore in the mining belt at 30 million tonnes a year (photo: K R Vinayan)

The Supreme Court on April 18 allowed reopening of the remaining category A mines, numbering 27, and 63 of the 72 category B mines in three districts of Karnataka—Bellary, Chitradurga and Tumkur—subject to certain conditions. Earlier on September 3 last year, the court had allowed 18 of the 45 category A mines to reopen. The court, however, cancelled all the 49 category C leases and two category B leases, where the leaseholders were found to have flagrantly violated the Forest Conservation Act of 1980. The cancelled leases will later be auctioned through bids by calling tenders. The court has also put a ceiling on the total production of iron ore from the region at 30 million tonnes a year.

While delivering its final verdict on the petition filed by Dharwad-based non-profit, Samaj Parivartana Samudaya (SPS), against the Karnataka government, the court accepted almost all the recommendations submitted by the Central Empowered Committee (CEC) appointed by the court that looked into illegal mining in the region. The court has suspended operations in seven mines along the border of Karnataka and Andhra Pradesh, till the boundary is reestablished under the supervision of the Geological Survey of India.

SPS filed its petition in 2009 after the failure of the state government to curb indiscriminate and illegal iron ore mining in the region. The government took no corrective measures even after a report by the Lokayukta, the state’s Ombudsman, in 2008. The report had brought to light all the details of how the mining mafia, in connivance with government officials, were plundering the state’s natural resources at an unbelievable pace. The petitioners prayed for immediate directions to the state government and the Central government to stop all mining activities in the forest areas of Karnataka and Andhra Pradesh which violated the Forest Conservation Act of 1980 and the Mines &Minerals (Development & Regulations) Act of 1957 and take penal action against the violators.

“What followed thereafter is unprecedented in the history of the Indian environmental jurisprudence,” notes the judgment. There were many reports by CEC, interlocutory applications by the petitioners and interim orders by the Supreme Court.

The interim report submitted by CEC in April 2011 revealed large-scale illegal mining and consequent damage to the forests, water bodies and to the ecosystems. CEC had noted that there was not even a single mining company that did not violate the law. In July 2011, the court banned mining activities in Bellary and within four weeks extended the ban to the other two districts, based on the petitions by SPS. The ban came just a day after the Lokayukta’s second report, which revealed that the state exchequer lost more than Rs 16,000 crore due to illegal mining. The court then exempted the National Mineral Development Corporation (NMDC) from the ban on mining activities; the company was allowed to mine one million tonnes a month.

Conditions for resuming mining

Mines which have been allowed to resume operations will have to get all clearances afresh. Besides, each mine will have to implement a Reclamation & Rehabilitation (R&R) plan in a time-bound manner. Indian Council for Forestry Research and Education (ICFRE) is in the process of preparing R & R plan for each mine separately. According to H R Srinivasa, director, Karnataka Mines & Geology Department, so far R& R plans have been prepared for 70 mines.

Category A mines can implement the R & R along with mining. Category B mines will have to first complete R & R plan before resuming work. They have to pay fine for their illegal actions: Rs 5 crore for each hectare of forest they encroached for mining and Rs 1 crore for encroaching for dumping waste and other purposes. As per the Supreme Court order of September 28 last year, which has been reiterated in the final judgment, this is the absolute first step. CEC has to constitute a committee to determine the exact national loss from illegal mining. Category B mines will have to pay additional fines later and they have to give written undertaking that they will pay the additional amounts.

At present, the sale of ore is being carried out by a monitoring committee consisting of the director of Karnataka Mines & Geology Department, principal chief conservator of forests and chief conservator of forests. As for category A mines, 10 per cent of the sales proceeds will be retained by the monitoring committee. In the case of category B mines, 15 per cent of sales proceeds will be retained. In the case of category C mines, the committee will retain the whole amount obtained through selling old stocks of ore. All these will go to a special purpose vehicle led by the chief secretary of the state, which would implement a comprehensive environment management plan for "mining affected zones".

Judgment not transformational

“This is the first judgment by the Supreme Court in a mining case involving illegalities, irregularities, criminalities and corruption committed on an unbelievable scale. So the judgment should have been far-reaching,” points out Vishnu Kamath, one of the petitioners in the case. The verdict has its positive aspects but it will not transform the culture of lawlessness prevailing in the mining sector, he says.

More importantly, as he points out, the judgment will set precedent for all mining cases. The categorisation by the CEC may be applied in those cases, too. The petitioners had argued in court that the categorisation of mines into three groups on the basis of only forest encroachments was faulty.

“Mining companies in category A are not holy cows,” says S R Hiremath of SPS, petitioner in the case. Almost all the companies have committed crimes like illegal transport, under-voicing the sales, illegal export and violation of approved mining plans, he points out. Some of them in category A have leases falling in category B and category C. Those who have committed crimes need to be prosecuted and punished, he says.

“What’s positive about the judgment is that it did not override the court’s interim orders,” points out Hiremath. As per the September 28, 2012 order of the court, the CEC was supposed to constitute a committee to determine the exact amount of ore that has been taken out by each company. “The judgment reiterates this order,” he says. The Supreme Court has also said the order will not affect any ongoing investigation in the region. The Central Bureau of Investigation is at present is probing a few cases connected with illegal iron ore mining and exporting. In fact, CEC was supposed to constitute the committee within three months but it has not done so.

Going may get tough for mining firms

Though the court has allowed resumption of operations, it will not be easy for many companies which are fighting cases in lower courts among themselves. There are leases where the Archaeological Survey of India has obtained stay order on mining in Bellary since it affected an ancient temple. Also, it may not be economical for many companies to resume mining since the approved quantity of the ore that can be extracted will be much lower due to the cap on the total annual iron ore production, points out Kamath. Though embargo on new leases has been lifted, the state government may not be able to issue many new leases because of the cap.

The petitioners in their interlocutory application had prayed for appointing an investigating team with prosecution powers and an independent committee for monitoring the resumed mining activities and the implementation of the R&R plans. The court has not said anything on this.

“We’re happy that we succeeded in curbing the unbridled mining that led to ecological destruction and collapse of governance. Now a new system is going to be implemented. We have to wait and see what is going to happen on ground. We will be on vigil and continue our fight as political activists,” says Hiremath.


Supreme Court judgement dated 18/04/2013 in W.P.(C) No. 562/2009 Samaj Parivartana Samudaya & Ors. Vs. State of Karanataka & Ors

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