The Karnataka government is all set to stock up Rs 10,000 Crore from the iron ore mining sector which will be transferred to a special purpose vehicle (SPV) to undertake social infrastructure development works in three mining districts. Here large scale environment degradation has taken place due to iron ore mining.
“As directed by the Supreme Court, based on the recommendations of the Central Empowered Committee (CEC), the state government has set in motion the process of forming an SPV. The government proposes to mobilise this money from various sources,” says H R Srinivasa, Director, department of mines and geology.
Talking to reporters assembled at a two-day 2nd annual conference organised by OreTeam, a Delhi-based mining research firm, he said the government would mobilise 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 licences.
The government would also collect about 20 per cent from the sale of iron ore through e-auction (about Rs 1,200 Crore) and Rs 5 Crore penalty for every hectare of encroachment and Rs 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 Rs 6,000 Crore and 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. 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.
