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Apr 18, 2013 at 12:25pm IST

After two years, Supreme Court allows legal mines to reopen in Karnataka

New Delhi: In a huge relief for mining companies in Karnataka, the Supreme Court on Thursday allowed 118 legal mines to reopen in three districts after a gap of two years.

It, however, also cancelled leases of all mine projects planned outside the sanctioned area of Karnataka's Bellary district. The illegal iron ore mining on Andhra-Karnataka border would remain suspended till demarcation of boundary

between the two states is completed, the court said.

The apex court's decision was based on the recommendations made by the Central Empowered Committee, which was constituted by the Supreme Court to look into the mining issues in Karanataka.

The court delivered its judgement on a PIL, which was filed three years ago seeking a ban on illegal mining and a high level inquiry into the role of politicians. The PIL's petitioner had named top leaders from Congress, Bharatiya Janata Party and Janata Dal Secular. While mining barons, the Reddy brothers, are already facing a CBI probe, former Karnataka Chief Minister BS Yeddyurappa is out on anticipatory bail in a related case.

The ruling is the latest step back from a total ban on mining in the state that was put in force in 2011, because of environmental concerns. In September, the Supreme Court allowed 18 mines in Karnataka to resume operations, while state-run miner NMDC was cleared to produce one million tonnes a month in August 2011.

India used to produce about 200 million tonnes a year of iron ore and exported about half of that, mostly to top buyer China. But a clampdown on illegal mining, and exports from Karnataka, have slashed both output and shipments.

(With additional information from Reuters)