News and Events

Business Standard reported that Karnataka government is looking to mobilize close to INR 10,000 crore from the iron ore mining sector which will be transferred to a special purpose vehicle to undertake social infrastructure development works in the three mining districts where large scale environment degradation has taken place due to iron ore mining. Mr HR Srinivasa director, department of mines and geology said that “As directed by the Supreme Court, based on the recommendations of the Central Empowered Committee, the state government has set in motion the process of forming an SPV. The chief secretary has held a meeting in this regard on June 4 and June 5. The government proposes to mobilize this money from various sources.” Talking to reporters on the sidelines of an industry conference, he said the government would mobilize funds from the auctioning of Category C mines (which had carried out substantial portion of illegal mining). There are about 49 mining leases in the ‘C’ category and the CEC has recommended cancellation of these licenses. The government would also collect about 20% from the sale of iron ore through E auction (about INR 1,200 crore) and INR 5 crore penalties for every hectare of encroachment and INR 1 crore for dumping mineral waste outside the dump area. The state government has sold about 22 million tonnes of iron ore of the 25 million tonnes stockpile released for e auctions. The sale value of this ore was about INR 6,000 crore; he said adding that iron ore would be sold in the state only through e-auctions till April 2014 as recommended by the CEC. All these funds would be put into the SPV which will take up various social infrastructure creation measures in the mining districts of Bellary, Chitradurga and Tumkur. The state chief secretary would be heading the SPV as directed by the Apex Court. Mr Srinivasa added that the government is presently waiting for the Supreme Court to pronounce its order on the ‘C’ Category mines and the government would go ahead with the formation of the SPV only after that.