Banning, Compensation, and Restoration: Karnataka Mining Regulations Update

The court imposed a ban on mining operations in certain districts of Karnataka, later lifting it for some 'Category A' mines. The focus shifted to 'Category B' mines, with requirements for compensatory payments and implementation of Reclamation and Rehabilitation (R&R) plans. Leaseholders were directed to make compensatory payments for environmental damage and illegal activities, with guarantees for R&R expenses. Additionally, a Special Purpose Vehicle (SPV) was to be established for environmental restoration, overseen by the State of Karnataka and audited by the CAG. Mining operations in specific forest areas were suspended, and further actions were outlined for environmental restoration.

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Issues Involved:
1. Ban on mining operations.
2. Resumption of mining operations in Category B mines.
3. Compensatory payments and Reclamation and Rehabilitation (R&R) plans.
4. Constitution of a Special Purpose Vehicle (SPV) for environmental restoration.

Summary:

Ban on Mining Operations:
This Court, by orders passed on July 29 and August 26, 2011, had imposed a ban on mining operations in all the mining leases (except two mining leases of M/s. NMDC Ltd.) in the districts of Bellary, Tumkur, and Chitradurga in the State of Karnataka. Later, the ban was lifted for some 'Category A' mines under certain conditions.

Resumption of Mining Operations in Category B Mines:
The Court now proposes to deal with the Category B mines. The CEC has categorized 65 mining leases in 'Category B' and 7 in 'Category B-1'. This order pertains to the 63 'Category B' mining leases. The amicus suggested steps essential before considering the resumption of mining operations, including compensatory payments and the implementation of the R&R plan.

Compensatory Payments and Reclamation and Rehabilitation (R&R) Plans:
I. Compensatory Payment:
(a) Leaseholders must pay Rs. 5 crores per hectare for illegal mining pits outside the sanctioned area.
(b) Rs. 1 crore per hectare for illegal overburden dumps, roads, offices, etc., outside the sanctioned lease area.
A Committee will determine the final compensatory amount based on the value of illegally extracted ore and environmental damage.

II. Guarantee Money for R&R Plan:
The CEC will estimate the expenses for the R&R plan, and leaseholders must pay this amount as a guarantee. If a leaseholder defaults, the CEC may use the guarantee money to implement the R&R plan through another agency.

III. Additional Payment:
Each leaseholder must pay 15% of the sale proceeds of its iron ore sold through the Monitoring Committee.

IV. Implementation of R&R Plans:
R&R plans for the 63 'Category B' mines should be prepared and implemented without delay.

Constitution of a Special Purpose Vehicle (SPV) for Environmental Restoration:
The State of Karnataka is directed to set up an SPV for ameliorative and mitigative measures as per the "Comprehensive Environment Plans for the Mining Impact Zone" (CEPMIZ). The SPV would be under the Chairmanship of the Chief Secretary, Government of Karnataka, and would include senior officers from relevant departments. The SPV would function transparently, with accounts audited annually by the CAG. The CEC is directed to submit a detailed report on the larger reclamation and rehabilitation program to be undertaken by the SPV by October 10, 2012.

Additional Directions:
The Joint Team is directed to prepare survey sketches for six mining leases in the Bellary Reserve Forest in District Anantapur, Andhra Pradesh. Mining operations in these leases shall remain suspended until further orders. The CEC is also at liberty to forward a representation received from M/s. Laxmi Narayan Mining Company to the Central Bureau of Investigation.

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