Indian Supreme Court allows limited iron ore mining in Karnataka

Iron ore mining in India's Karnataka state will be allowed to continue, but in a limited way, the country's Supreme Court has decided.

Reuters reports the court has permitted mines greater than 50 hectares to restart after their environmental plans are approved, which would potentially bring 4.5 million tonnes  to local steelmakers.

Iron ore mining in Karnataka was banned last year as a measure against  illegal mining causing environmental degradation, and the need to preserve the raw material for local steel mills.

The region used to export some 100 million tonnes of iron ore annually, about half its production, but last month the Supreme Court set a production cap of just 30 million tonnes. State-run NMDC is allowed to mine a million tonnes a month.

The restrictions have led to shortages in the supply of Indian steel. Karnataka was also caught up last year in a corruption scandal involving the  head of the BJP government in Karnataka. BS Yeddyurappa was forced to resign after he was accused of being at the centre of a $3.6 billion mining fraud involving the illegal export of iron ore.

Reuters reported the upshot of this week's Supreme Court decision is the state government will decide how much iron ore each mine can produce up to a limit set by the Supreme Court. Mining is expected to begin again in the next two weeks according to the vice-chairman of  the Federation of Indian Mineral Industries.