MUMBAI (Reuters) ? The Supreme Court partially lifted an iron ore mining ban imposed last week in Karnataka by allowing NMDC to mine up to 1 million tonnes per month of the steel-making ingredient from Aug. 6, according to a court document seen by Reuters.
"...we are of the view that in extra-ordinary circumstances, NMDC alone be allowed to operate its mines," the court said in its order, and permitted it to start production from two of its existing mines located in the Bellary district.
On July 29, the Supreme Court had imposed an interim ban on mining activities in the region, citing environmental degradation.
State-run NMDC, which produces about 15 percent of country's iron ore, mines about 6 million tonnes of iron ore annually from the Bellary region.
"We will mobilise all our resources to meet the requirements of the end user," said Rana Som, chairman of NMDC.
The company raised its iron ore output target to more than 30 million tonnes in the year to March 2012 from it prior target of 28-29 million tonnes after the court order.
"Because of Kumaraswamy (mine) we will able to produce 2 million tonnes more," Som said. The company had produced 4.2 million tonnes from Donimalai, its other mine in Bellary, in 2010/11.
The court has also directed the ministry of environment and forest to ask domain institutes to find out about "different
degrees of environmental degradation" and submit the report in three months.
It asked the state government to collect a royalty of 10 percent on the market value of the iron ore mined for rehabilitation of the area.
"We may clarify that no part of this production shall be exported outside India till further orders," the court order said.
Karnataka banned iron ore shipments in July last year to curb illegal mining and has yet to issue export permits, despite an order from the Supreme Court to lift the ban in April.
Lower Indian exports have helped boost spot iron ore prices which are trading at more than two-month highs, at above $170 per tonne, amid strong demand from top buyer China.
Karnataka accounts for about a quarter of iron ore shipments from India, the world's No. 3 supplier of the steelmaking raw material after Australia and Brazil.
Many companies have been hit due to the mining ban in the iron ore rich region. JSW Steel has slashed capacity due to lack of supplies, while Tata Metaliks said it could shut its plant in Maharastra state if supplies do not normalise.
(Editing by Aradhana Aravindan)
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