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India: Stage set for resumption of ore exports from Karnataka

Iron ore exports from Karnataka may resume after several years as the two key agencies that have long opposed the shipments citing rising demand for the key input for steel from domestic manufacturers have relented.

As the Union steel ministry, in an affidavit to the Supreme Court, supported lifting the ban on iron ore exports from the state, the apex court on Monday asked the Karnataka government to clarify its stand by submitting its “Cabinet decision on resumption of exports from the state”. The state government, which has so far opposed any exports, said it was ‘reviewing’ its stand.

While reserving its judgment, a Bench led by Chief Justice Ramanna told the Karanataka government: “Please submit the cabinet decision of the state also and submit it before tomorrow. Say in yes or no. Nothing in between.”

The apex court also said it will pass an order on whether miners can sell their ore through modes other than e-auction, which the court had mandated earlier. The CJI also raised concerns on how the situation would be dealt with if the ban is lifted. “Suppose we allow e-auction then who will monitor the quantity being sold, etc,” he said, while hinting at appointing a committee to look into enforcement issues.

The steel ministry on Monday spelled out the central government’s support for resumption of exports, saying that the government’s policy favours iron ore exports and Karnataka should not be excluded from its ambit.

Additional Solicitor General KM Nataraj submitted that under the extant policy of the Union government, there is no bar on export of iron ore. He also said the issue of deficit in production of iron ore can’t be raised in case of Karnataka mines only.
He urged the Supreme Court to vacate its earlier ban as rising domestic demand of steel requires availability of proportionate iron ore and the shortage can be met by lifting the district-level caps on production from the three districts of Karnataka: Bellary, Chitradurga and Tumkur.

The Karnataka miners requested the SC not to deprive them of more revenue, and the country of more foreign exchange. They contended that whatever irregularities that existed earlier had been addressed, miners have been punished and the punishments can not continue forever. Senior counsel Dushyant Dave, appearing for miners, said, “illegalities have been removed. We are not proud of it but it can’t be continued till the time immemorial”.

Senior counsel Rakesh Dwivedi, appearing for the Federation of Indian Mineral Industries, also sought lifting of the ban.
The Karnataka Iron and Steel Manufacturers Association told the judges that while it was not opposed to lifting the ban, exports should be carried out after meeting domestic iron ore requirements.

Stating that steel prices are at their peak in the international market, senior counsel Kapil Sibal, appearing for the iron and steel body, asked the SC to consider whether Indian iron ore should benefit another country instead of India’s own steel industry, as up to 70% iron ore is exported to China for its steel industry.

“We are saying there should be an e-auction as it will be sold internationally at windfall profit and nothing will be brought to e-auction. The export should be allowed, but after the Indian steel industry getting access to it. They (miners) want to export because the prices are high,” he said.

However, counsel Prashant Bhushan, appearing for petitioner Samaj Parivartana Samudaya, an NGO, said environment and ecology are national assets and need to be preserved.

“There was no need to allow the export as the steel ministry said there was no surplus of iron ore,” he said. He cited the 2013 judgment, former Lokayukta Justice Santosh Hegde’s report and Parliamentary panel findings to submit that only finished steel should be exported, which would generate more employment opportunities as minerals are national assets.

The Supreme Court had in 2013 banned the export of iron ore from Karnataka to check environmental damage and fixed the maximum permissible annual production limit at 35 MMT for category A and B mines.
Source: Financial Express

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