Iron ore e-auction: SC seeks alternative mechanism

The Supreme Court on Tuesday directed the Karnataka government to place on record before it an alternative mechanism for e-auction of iron ore extracted from Ballari, Tumakuru and Chitradurga mines.

The court also agreed to consider the steelmakers’ plea for increasing the iron ore mining cap from 30 to 40 million tonnes per annum.  A three-judge bench presided over by Justice Ranjan Gogoi asked advocate Anita Shenoy, representing the state government, to respond within six weeks to the plea by lobby group Federation of Indian Mineral Industries (FIMI) to scrap iron ore e-auction system. FIMI, represented by senior advocate Gopal Subramanium, submitted that instead of e-auction, there should be long-term agreement between the producers and buyers as part of the new mechanism. He relied upon the suggestion made by the Central Empowered Committee (CEC) in this regard by its report on April 28, 2016. Advocate Prashant Bhushan, appearing for NGO Samaj Parivartan Samudaya, opposed the plea, saying that the e-auction was meant to provide the best price and royalty to the state government.

The industry body, however, said even if there is long-term agreement for purchase, it would continue to be examined by the monitoring committee.

The bench, also comprising Justices Prafulla C Pant and Navin Sinha, asked the CEC to explain within six weeks, if there is any chance of raising mining cap of 30 million tonnes per annum (mtpa) for iron ore in Karnataka. The steel makers, represented by senior advocate C U Singh, sought direction for raising the cap.

The apex court had on April 18, 2013 allowed mining in Ballari, Tumakuru and Chitradurga districts, but with the cap of 30 mtpa. The court, however, refused to hear a plea by the Karnataka government for permission to increase the cap on mining put on the public sector companies.

Meanwhile, the court directed for release of 90% mandatory deposit of the district mineral fund, if the reclamation and rehabilitation of the areas, which suffered environmental damage due to extensive mining, was complete.