Cancel Leases of 49 Mines, Says SC Panel

KARNATAKA ILLEGAL MINING INVESTIGATION

SC-appointed committee says the mines violated terms of their licence

Acommittee set up by the Supreme Court tasked with investigating illegal mining in Karnataka has submitted its final report containing recommendations that could radically change how mining is done in the country and jeopardise planned investments in steel plants in the southern state. 

The Central Empowered Committee, in its report submitted on Saturday, has recommended the cancellation of leases of 49 mines that have violated the terms of their licence. 
It is also believed to have recommended the auction of these leases, according to people familiar with its contents. These mines produce up to 10 million tonnes of iron ore per year. 
The people familiar with the report said 45 mines cleared of any wrong doing will be allowed to mine as soon as the ban is lifted, while 72 other mines will resume only after they have paid penalties. 
The collected fines could be used to establish a Sustainable Mining Development 
Fund and setting up dedicated mining infrastructure for the area. A moratorium on future leases until the state has recovered forest lost to illegal mining and established dedicated mining infrastructure, is also on the cards. 
The CEC is also believed to have agreed with a report by the Council for Forest Research and Education that had recommended capping iron ore production in Karnataka at 30 million tonnes. 
The report, commissioned by the apex court, had said this was the state's so-called carrying capacity, meaning that production beyond 30 million would cause irreparable damage to the environment. 
However, accepting this figure, which meets current requirements, would leave little room to accommodate planned investments of players such as Arcelor-Mittal and Posco. 
Two years ago, Karnataka signed a long list of MoU's with NMDC, Bhushan, Tata Metaliks, Adhunik and Kirloskar for setting up steel plants. These MoUs largely committed the state to providing captive iron ore mines to meet a part of the requirement of these proposed plants. Before the court banned all mining activity in the state in July 2011, the state is believed to have been on the verge of recommending captive blocks for ArcelorMittal, JSW and state owned KIOCL in the Ramandurg area, which has rich deposits of iron ore. 
Both Posco and ArcelorMittal have in the past maintained that they would not be putting up a plant without access to captive iron ore. If the court accepts the regional cap and moratorium on new leases, steelmakers could be waiting a long time while for their promised mines. "The report seeks to fix permanently the weakness in existing frameworks that were abused for illegal mining to this extent, so that the Supreme Court need not intervene all the time," said a person familiar with the recommendations. There could be suggestions for the Indian Bureau of Mines which did not monitor individual mines leading to many producing beyond their licenses capacities. 
The Supreme Court has so far only allowed state miner, NMDC to produce a million tone of ore a month. 
meera.mohanty@timesgroup.com