Supreme Court passed Order to lift Ban on Karnataka’s Iron ore Export

The Supreme Court passed an order on 5 April 2011 to lift Karnataka’s iron ore export ban which was imposed by the state back in July 2011. This order will come into effect from 20 April 2011. The State Government had notified the Karnataka Prevention of Illegal Mining and Transportation Rules, 2011 on 1 April 2011.

The Karnataka State Government was given 15 days time to implement the new rules for regulating iron ore mining and transportation.

The new rules state that minerals have to be transported only under a valid mineral despatch permit and make it mandatory for permit holders to file monthly returns. The monthly returns shall be reconciled on a quarterly basis. Vehicles transporting minerals are to be fixed with Geographical Positioning System and radio frequency identification devices.

Karnataka had on 26 July 2011 imposed a ban on iron ore exports from the State's 10 minor ports to check illegal mining. The movement of the iron ore for exports were prohibited by restricting the issue of despatch permits on 28 July 2010. The Supreme Court had in February 2011 given Karnataka time till 31 March 2011 to implement norms to curb illegal mining and transportation. However the State wanted more time to strengthen its regulatory mechanism. The order to lift the ban was passed only after the court was told about the notification of Karnataka Prevention of Illegal Mining, Transportation and Storage of Minerals Rules for regulating iron ore mining and transportation.

The court also asked the state government to take into consideration the report of the lokayukta Santosh Hegde on illegal mining while implementing the rules.

The state’s decision to ban iron ore export was challenged by mining firms Sesa Goa, MSPL, SB Minerals, Minerals Enterprises and Sathya Granites before the apex court. The companies had during the hearing brought into the notice of the court that despite the assurances that the ban was of temporary nature applicable only for six months, the ban was not lifted. The state government had not issued permits to transport the iron ore extracted from their mines even after lapse of six months. The court had mentioned that if the State government did not bring the proposed Karnataka Prevention of Illegal Mining Transportation and a Storage of Minerals Act, 2011, into force by the end of March 2011, mining firms would get interim relief.

The court’s latest order to lift the ban would benefit these companies the most. The Sesa Goa scrip gained 6.36 per cent to close at 313.65 on the BSE on 5 April 2011.