New Delhi, April 16, 2011 The Hindu

Panel slams Karnataka over illegal mining

J. Venkatesan

The Supreme Court-appointed Central Empowered Committee (CEC) on Friday slammed the Karnataka Government for allowing large-scale illegal mining in the State, particularly in Bellary district, in connivance with officials and public representatives.

Taking on record the CEC's interim report submitted by senior counsel and amicus curiae Harish Salve, the Bench comprising Chief Justice S.H. Kapadia, Justice Aftab Alam and Justice K.S. Radhakrishnan issued notice to the State Government and sought its response by April 21.

The court, acting on the allegations contained in the writ petition filed by Samaj Parivartana Samudaya had asked the CEC to inspect the mines in Karnataka and submit a report.

Illegal export

In its report, the CEC said that from 2003-04 to 2009-1010, a total of 304.91 lakh metric tonnes of iron ore had been exported without valid permits.

Further 71.28 lakh metric tonnes was illegally exported in 2009-10 alone. "At a conservative rate of Rs. 5,000 per tonne, the nominal value of the illegally exported iron ore from Karnataka comes to Rs. 15,245 crore.

These figures starkly highlight the massive scale on which illegal mining was going on in Karnataka."

It said: "There are 266 iron ore mines in Karnataka, of which 134 are located in forest area while 132 are in non-forest area. These mines cover 11,604 hectares of forest land. In Bellary district, there are 148 mines, of which 98 are in forest area and 50 in non-forest area (involving 9,527 hectares of forest land and 1,341 hectares of non-forest land)."

Mineral reserves

The production of iron ore during 2009-10 was about 50 million tonnes and total iron ore mineral reserves (hematite) is about 1,148 million tonnes.

At the present rate of mining, the mineral reserves of the State will be exhausted in about 20 years.

However, if figures of illegal mining are added, the resources will get exhausted in a much shorted period and raises the serious question of inter-generation equity."

Documents submitted

The CEC submitted to the Bench in a sealed cover a number of documents regarding alleged receipt of huge amounts as donations by a trust managed by close relatives of a senior political leader in the State; growing mining mafia in Bellary; alleged acts of a senior political leader of the State; alleged export duty/income tax evasion by mining company owned by a senior political leader.

The CEC said in the last nine years it has dealt a number of cases involving illegal mining in Haryana, Rajasthan, Uttar Pradesh, Madhya Pradesh, Chattisgarh and Orissa. However, all these cases pale into insignificance when compared to the illegal mining on colossal scale that has taken place in Karnataka, particularly in Bellary district and that too with the active connivance of the officials of the departments concerned and also public representatives.

It said "out of 99 cases of mining leases involved in illegal mining, the survey and demarcation of only seven leases have so far been completed."

Referring to the report of the Lokayukta indicting the State Government and a former Chief Minister, the report said: "Unfortunately, hardly any perceptible follow-up action and corrective measures were taken on the findings of Lokayukta."


The Central Empowered Committee

The CEC was constituted on 17 September 2002 through a Gazette Notification issued by the Ministry of Environment and Forests. The CEC has been constituted as an Authority under the provision of Sub section (3) of section 3 of the Environment (Protection) Act, 1986 in pursuance of the order of the Supreme Court dated 9-5-2002 and 9-9-2002 in W.P. 202/95 and 171/96 for a period of five years. The CEC’s broad task is to monitor and ensure the compliance of the orders of the Supreme Court concerning the subject matter of forests and wildlife and other issues arising out of the said order.

The CEC has been constituted by the Honourable Supreme Court of India with effect from May 9th, 2002 and presently comprises of the following six members:

  • Mr. P. V. Jayakrishanan, Chairman
  • Mr. M.K. Jiwrajka, Member
  • Mr. Mahendra Vyas, Member
  • Mr. M.K. Muthoo, Member
  • Mr. S.K. Patnaik, Member
  • Mr. P.J. Dilip Kumar, DGF & SS, Member

New Delhi, July 24, 2011 The Hindu

CJI raises concern over flouting of mining rules


Voicing concern over violation of mining rules, Chief Justice of India S.H. Kapadia on Sunday suggested that there should be a price regulatory mechanism for mineral exports as several private companies in the states were flouting norms and depriving government of huge royalty.

Speaking at an international seminar on "Global Environment and Disaster Management: Law and Society" in New Delhi, Justice Kapadia said there should not just be a monitoring mechanism in charge of appraisal of mining in India but also one for pricing.

"Today, what we find, at least for over a period of last six years, that all mining plans are there but at the state level they are being flouted for some reasons. I don't want to go for the reasons but we do not have machinery to supervise even those mining plants even for norms laid down for environment protection," Justice Kapadia said.

He insisted that the biggest problem in the mining sector is the pricing of the minerals which are exported.

"Take the case of royalty. Time has come when the excavated minerals should be auctioned or should have price discovery mechanism. You have cross-border arms length pricing but we do not have domestic arms length pricing. The result is under invoicing," Justice Kapadia said.

He maintained that minerals sold abroad went for a huge profit margin because there is "no exemplar" to gauge ad valorem prices when the excavated material is being exported.

He insisted that there is a huge difference between the domestic prices and the price at which it is sold abroad.

New Delhi, July 29, 2011 The Hindu

Alarming illegal mining in Bellary, only 10% is legal: Supreme Court panel


Ninety per cent mining in Bellary district of Karnataka is illegal which has converted the area of green scenic into a ‘war-ravaged' zone with huge ugly scars, says the Supreme Court-appointed committee.

Placing its report before the apex court, the expert body said a majority of companies are involved in illegal mining and recommended the State government be directed to cancel their lease.

"It is estimated that the production of mines which are not found to be involved in substantial illegalities and which are eligible to continue mining operations may not be more than 10 per cent of the total production of the iron ore in the district," the panel said in its 23-page report.

There are 148 iron ore mining leases sanctioned in Bellary district, out of which 124 now exist and it is estimated that about 90 percent of the production is from the forest area.

"The situation at present is alarming and calls for immediate radical remedial measures," senior advocate Shyam Diwan, appearing for the panel, said.

"As a result of mining and associated activities, today many areas present a barren dismal picture akin to a war-ravaged zone with huge ugly scars," he said adding a "majority of mines are involved in illegal mining outside the sanctioned lease area".

"In large number of cases, the permission for increasing the production of iron ore manifold has been granted recklessly without apparently taking into consideration the already alarming situation in the area," the report said.


New Delhi, July 29, 2011

Supreme Court suspends mining operations in Bellary district

Legal Correspondent The Hindu

One of the mining sites in Bellary, Karnataka. The Supreme Court on Friday suspended mining of iron ore in 10,868 hectares in the district. File Photo: G. R. Somashekar

The Supreme Court on Friday directed the suspension of all mining operations and transportation in an area admeasuring approximately 10,868 hectares in Bellary district of Karnataka till further orders.

The Forest Bench, comprising Chief Justice S.H. Kapadia and Justices Aftab Alam and Swatanter Kumar passed the order after perusing the report of the Central Empowered Committee that said "over-exploitation" of the area had caused large-scale environmental degradation.

The Bench said, "We are satisfied that, on account of over-exploitation, considerable damage has been done to the environment. We are taking a holistic view of the matter. We have suspended these operations keeping in mind the precautionary principle, which is the essence of Article 21 [right to life] of the Constitution."

The Bench took note of the submissions of Attorney-General G. E. Vahanvati that the Ministry of Environment and Forests (MoEF) would consult the Ministries of Mines, Steel and Commerce and submit a report. He also said the MoEF would undertake a cumulative environment impact assessment in the district.

To ascertain the impact of the ban on the economy and the steel industry, the Bench directed the MoEF to submit an interim report indicating "what is the requirement of Steel Industry in India as far as iron ore is concerned."

The Bench said the MoEF should also spell out "the total requirement of the steel industry in the country, how much is met by the Bellary mines. How much of the quantity of iron ore is domestically required and internationally exported?"

The Court directed the MoEF to obtain this requisite information from the Ministries of Mines, Steel and Commerce.

‘Convene meeting'

It said: "the Secretary, MoEF, will immediately convene a meeting of the Secretaries of the Ministries concerned and furnish a report within a week."

The Bench asked the Karnataka government to prepare a rehabilitation scheme for restoration of the forest wealth; to create a fund for this purpose and to recover the cost from the miners who had degraded the environment.

The Court also asked the State government to fix royalty on the export of iron ore on the basis of the international rate.

When the Attorney-General submitted that not all the exports were accounted for, the Chief Justice observed that this was a reflection of the "hidden economy" being exported abroad without anything coming back to the country. To know the environmental degradation caused due to mining in the districts of Tumkur and Chitradurga, the Bench directed the Central Empowered Committee to submit a report on Environment Impact Assessment on account of mining in these districts within three weeks.


Bellary, July 31, 2011 The Hindu

Over 8,000 tonnes of ore seized in Bellary

Staff Correspondent

This comes less than 24 hours after 49 iron ore-laden lorries were confiscated

Less than 24 hours after seizing 49 lorries transporting iron ore from BMC, a firm with which the Reddy brothers are said to be closely associated, the district authorities on Sunday seized 7,448 tonnes of iron ore being transported in two rakes (each rake comprises 58 wagons) in violation of the July 29 Supreme Court order suspending mining and transportation of iron ore from Bellary district.

Two rakes

Based on credible information that iron ore was being illegally transported in the rakes, the authorities swung into action and seized one rake transporting 3,724 tonnes of ore at Hagari railway station siding in Bellary taluk and another rake with the same tonnage at Toranagal in Sandur taluk.

In addition, the authorities seized 1,000 tonnes of ore unloaded at the JSW Steel Ltd. premises that was transported by road from Mysore Minerals Ltd. with which JSW Steel Ltd. has entered into a joint venture.

At Hagari, the iron ore purchased by Janaki Steels in Sidiginamola from Fomento company in Sandur taluk was loaded onto the train at Yeshwant Nagar loading point. The ore had to be unloaded at the Hagari station siding from where it had to be further transported to the Janaki steel unit by road.

At Toranagal the ore was loaded on the Fomento company premises and was being taken to JSW Steel Ltd.

Deputy Commissioner Amlan Aditya Biswas told The Hindu that verification of the permit issued by the Forest Department revealed that the rake stopped at Hagari was loaded at 10 p.m. on July 30. He turned down the claim of the steel unit that loading was completed on July 29 itself stating he would go by the documents.

"Transportation of ore, even with a valid permit, is illegal in the wake of the Supreme Court order which came into effect from the evening of July 29," he said.

‘No claimants'

On Saturday night, 49 lorries transporting iron ore from BMC to Cantonment station siding without permit were seized near Allipur on the outskirts of the city. Mr. Biswas said that so far no one had come to claim the ore seized near Allipur.

To a question, he said he would conduct an inquiry into Forest Department officials issuing permits for transporting iron ore even after the Supreme Court order, and submit a report recommending action for dereliction of duty.

Vigil to be stepped up

He said vigil would be stepped up to check movement of iron ore mined in Bellary district.

Two additional check-posts would be set up at strategic points.

"The Supreme Court's order is limited to Bellary district. However, iron ore mined in Chitradurga and Tumkur districts is also transported through the district. Vigilance staff will verify documents to ensure that the ore being transported is from outside Bellary district before allowing it to pass through the district," he said, and added that he had sought details of permits given to mining companies in those two districts for transporting the ore.

Mr. Biswas also said railway authorities had been informed about the Supreme Court order and had been instructed not to transport iron ore mined in Bellary district.

Sashidhar Bagli, Bellary tahsildar, Babu Kolekar, Deputy Superintendent of Police (Bellary Rural), and S.S. Hullur, Circle Inspector of Police, were among other senior officers present.


J. Venkatesan, August 5, 2011 The Hindu
Supreme Court lifts mining ban for NMDC in Bellary

Orders macro-level Environment Impact Assessment study in the area

The Supreme Court, which earlier suspended mining operations in the Bellary area, on Friday partially lifted the ban and allowed the public sector National Mineral Development Corporation to undertake mining in two leases to cater for the domestic market.

The Forest Bench of Chief Justice S.H. Kapadia and Justices Aftab Alam and Swatanter Kumar, however, rejected the plea by a private miners' association that private operators who had not violated any law be allowed to do mining.

Earlier, senior counsel Dushyant Dave, appearing for the association, said that the constitutional courtcould not pass orders in violation of contractual or statutory rights or perpetuate illegality.

Counsel said mining could be allowed subject to certain safeguards as suspending the operations would have a devastating effect on the economy and on the families of employees. “You [court] should have stopped Reddys from mining. Why should we suffer when we are doing something legally? Why penalise us?”

The CJI, who was shocked on hearing this submission, told counsel: “We are not cancelling your rights. We are acting under constitutional principles and Article 21. Production will come later. We have to balance environment and your rights. We are not perpetuating illegality. What was your association doing all these years? Give us the EIA [Environment Impact Assessment] report, we will consider your rights. Time has come when you have to do scientific mining. How many companies have corporate social responsibility?”

Attorney-General G.E. Vahanvati submitted a report explaining how the Bellary mines were catering for the needs of domestic companies and exports. Out of a total production of about 200 million tonnes of iron ore, roughly 50 per cent was exported and 50 per cent was used for the domestic market.

The Bench, after hearing counsel for various parties, said: “In order to balance the environmental concerns with economic development and keeping in mind the mandate of Article 21, including inter-generational equity, we are of the view that in extraordinary circumstances, the NMDC alone be allowed to operate its mines to the extent of providing one million tonnes per month commencing from August 6 till further orders.”

In respect of private and Karnataka State units, the Bench said it would consider allowing them to carry on with mining after the receipt of the EIA report.

The Bench directed that the macro-level EIA study be undertaken by the Indian Council of Forestry Research and Education (ICFRE) in collaboration with the Wildlife Institute of India, the FSI (the Forest Survey of India) and such other domain experts, as may be decided by the ICFRE in consultation with the Ministry of Environment and Forests (MoEF).

This would be in respect of Bellary district.

The Ministry would frame detailed Terms of Reference for the proposed study within one week. The study “shall also indicate whether the district of Bellary constitutes one single environmental unit or more than one unit with different degrees of environmental degradation. The report shall be submitted within three months.”

Royalty for Karnataka

Pointing out that Karnataka was losing revenue as it was not collecting royalty at market rates, the Bench said: “We make it clear that the State will charge royalty on the basis of 10 per cent of the current market value of the iron ore. The NMDC will maintain accounts in that regard. Today, Karnataka has been charging royalty at 10 per cent of the rates as determined by the Indian Bureau of Mines at the pithead.”

The order said: “The differential between that rate and the market rate will be accounted for by Karnataka and will be deployed for rehabilitation of the area concerned. No part of this production shall be exported outside India until further orders.

The NMDC will sell the production to the States in consultation with the Ministry of Steel, Government of India. Karnataka is directed to submit the reclamation and rehabilitation plan of Bellary district within three months.”


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