Supreme Court hints at lifting ban on iron ore export from Karnataka

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The Supreme Court on Monday asked the ministry of steel to clarify its stand on lifting ban on export of iron ore from Karnataka.

While noting that there is no restriction in other parts of the country on export of iron ore, a bench led by Chief Justice N V Ramana asked Additional Solicitor General K M Nataraj to take a comprehensive view of the matter and let the steel ministry file its response. “We also want lifting of ban. Now suppose, if we allow to lift the ban, such a huge quantity (of ore) will come into the market,” the bench asked, adding that it would want to assess the pros and cons of such situation. The CJI also said that the apex court is only concerned with the minerals already extracted right now.

However, the ministry of mines has told the apex court that “the restriction imposed in Karnataka was under extraordinary situation prevailing then because of unprecedented illegal mining. However, as the situation has changed, the court may allow export to bring these mines on par with the other States.”

Mining companies from Karnataka argued that government as well as the court-appointed central empowered committee (CEC) has favoured resumption of iron ore exports from the state. They argued that besides depriving the miners of more than three times the value they get while selling in the domestic market, the exports ban has also dented prospects of higher foreign exchange inflows into the country.

Senior counsel Dushyant Dave, appearing for miners contended as per the existing regime, the buyers (Steel companies) can import and domestic iron ore producers would have to sell through e-auction. “This order (banning of export from Karnataka) should be modified. There is no need for an affidavit of ministry of steel, the Union government has already granted export, we are in a need of foreign exchange, the ban should be lifted,” he said.

“… It (ore) is already excavated and lying on the floor. It is an environmental hazard. Nobody’s interest is served,” he argued.

 “Production is more than the demand. This ban order should be modified. The government is encouraging the export of iron ore.

Earlier the duty was 5% now it is nil. There is a need for foreign exchange. The ban should be lifted,” senior counsel Rakesh Dwiwedi argued. Senior counsel Kapil Sibal appearing for steel manufacturers’ body, contended the ore is being used by the steel industry. “There is iron ore on ground. Why don’t we put it for e-auction? If we (steel companies) don’t buy, then allow it for exports.” He also pointed out that ore prices have  shot up four times in recent months.

However, the petitioner, Samaj Parivartan Samudaya, an NGO, opposed lifting of ban, saying the Steel Ministry was yet to make its stand clear in the matter as it had always maintained that there is a shortage of iron ore for domestic use.