The State government, which has strongly favoured establishment of a Special Purpose Vehicle (SPV) for rejuvenating areas devastated by illegal mining, has found that mining lessees have made windfall profits with little investment and with negligible concern for sustainability.

The government is in favour of retaining a higher portion of the revenue earned by the lessees so that it could finance infrastructure and environment projects in districts of Bellary, Chitradruga and Tumkur. In its interlocutory application before the Supreme Court this month, Karnataka has presented how mining lease holders have made supernormal profits without investing much funds. The next hearing of the case is scheduled on January 8.

The iron ore-starved steel industry in and around Karnataka might have to wait longer to for the smooth supply of key raw material for its blast furnaces as the opening of Category B mines, which contain larger deposits, is getting delayed.

The delay is due to non-fulfilment of certain conditions imposed on these mines by the Supreme Court. The Court is likely to hear the appeal for opening of Category B mines at the next hearing on January 8, 2013, industry sources said. The Supreme Court (SC) appointed Central Empowered Committee (CEC) has approved the reclamation and rehabilitation (R&R) Plans of 23 mines under Category B in Karnataka. These mines, which can together produce over six million tonnes of iron ore per annum, are presently awaiting the apex court’s nod to resume mining.

Loss due to non-revision of domestic prices by the company in line with movement of market price

Iron ore miner NMDC has suffered Rs 745.94 crore revenue loss during 2007-10 for not revising the domestic prices of the steel-making raw material in line with prevailing market rates, government auditor CAG said. "...Due to non-revision of domestic prices by the company (NMDC) in line with movement of market price, the company has suffered a revenue loss of Rs 754.94 crore during 2007-10," CAG said in a report, tabled in Rajya Sabha, today.