Bangalore: A Supreme Court-appointed panel may impose heavy fines on iron ore miners in Karnataka for violating norms.

Last week, the Supreme Court had laid down guidelines for levying fines on 63 mines, for which the violations don’t warrant cancellation of the lease. These mines, classified as category B mines, are located in the state’s districts of Bellary, Chitradurga and Tumkur.

The fines have been classified into three categories. Under the first category, fines have been levied for encroachment of land— 5 crore per ha for mining outside the sanctioned lease area and an additional 1 crore per ha for over-dumping, construction of illegal roads and other such violations.

Based on the information about the violations released by the Supreme Court’s Central Empowered Committee, Mint has calculated that the 63 mines will have to pay 936 crore as fines for these violations.

The second category of levies involves money that miners have to deposit for the implementation of reclamation and rehabilitation (R&R) programmes in the lease areas. According to the Federation of Indian Mineral Industries (FIMI), which is assisting in preparation of the R&R plans, nearly 53 reports have been submitted, of which 25 have been approved.

R.K. Bansal, chief executive of FIMI’s Sustainable Mining Initiative, said mines that are less than 50 ha in area will have to spend between 1 crore and 5 crore, while larger mines will have to spend 10-12 crore. At these rates, total R&R deposits for the 63 leases amounts to 400-600 crore.

The third category of the levies involves determining the amount of fines to be paid on the value of the illegally extracted ore. This may be the most difficult to calculate. According to a senior officer involved in the cleanup of Bellary, this process will involve measuring the ore extracted from the pit head for each mine.

“The court has given the committee three months, but it will be difficult to complete this process within that time," he said.

These measurements could see the levies rising much further, approaching close to 10,000 crore, the officer said. To get a sense of the scale of illegal mining, the Karnataka Lokayukta report in 2011 estimated that around 30 million metric tonnes (mt) of iron was illegally exported between 2006 and 2011. Taking the average selling price for each of the five years, the value of illegally exported iron ore could be 12,228 crore.

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