April 24, 2012: The Supreme Court on April 20 allowed mining to restart in iron ore mines of more than 50 hectares in Karnataka state after their environmental plans are approved, potentially bringing 4.5 million tons per annum (mtpa) to local steel producers.
The move is likely to have little impact on exports, however, which remain stalled as Karnataka failed to implement the Supreme Court order that the export ban may be lifted.
India used to export about 100 mt a year of iron ore - half its production - but clampdowns on illegal mining and the federal government's desire to keep production for domestic steel mills has slashed that figure.
Now, the Karnataka state government will decide the amount of iron ore that each mine can produce up to a limit set by the Supreme Court, Dhiraj Kumar, one of the lawyers who represents appellant Mineral Enterprise Ltd, said.
This would be in addition to 1 mt that the Supreme Court has allowed state-run NMDC to mine every month.
The Federation of Indian Mineral Industries (FIMI) was optimistic the move could herald the resumption of mining throughout the state.
In 2011, the Supreme Court banned iron ore mining in Bellary, Chitradurga and Tumkur districts of Karnataka citing environmental violations, and asked a federal government body to carry out an environmental impact assessment.
Last month, the court set a cap on annual iron ore output of 25 mt in Bellary, and of 5 mt altogether from Chitradurga and Tumkur districts.
The court has only allowed mines with low environmental violations to extract iron ore and the state government can now set limits within these caps.
Last week, the top court asked companies in Karnataka to push ahead with land clean-up for rehabilitation of affected people and reclamation.