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India's court allows reopening of iron ore mines

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(Globalpost/GlobalPost)

India's top court on Thursday allowed more than 100 iron ore mines to resume operations in southern Karnataka in a major relief for resource-hungry steel mills that require the raw material.

The court accepted the report of a central government committee which recommended that mines respecting environmental regulations should be allowed to resume.

"The court has permitted resumption of operations in 117 mines subject to compliance with the terms and conditions stipulated by the empowered committee," said Phanindra Rao, a lawyer who represented the mining industry in the case.

"It is a major decision which will give a huge boost to the mining sector," Rao told AFP.

The three-judge bench of the court, however, cancelled the leases of 49 mines in the state over large-scale irregularities.

"The leases of 49 mines... stand cancelled," said Judge Ranjan Gogoi.

India's Jindal Steel welcomed the court's order, saying it had come "at a time when the steel industry was at the brink of closure due to non-availability of iron ore".

"The opening up of mines will enable raw material linkages for further investments in the steel sector," the steel giant said in a statement.

All mining activities were banned in 2011 in Karnataka -- home to some of the country's biggest deposits of iron ore -- after companies were accused of conniving with government officials to mine ore illegally.

The scam cost the state and federal exchequers $3.6 billion, a corruption ombudsman said, and state chief minister B.S. Yeddyurappa, accused of playing a central role, resigned after the scandal broke.

Mines in the western state of Goa were also ordered to close last year after a government-backed inquiry estimated illegal trade in iron ore had cost more than $6.0 billion over five years.

A Humam Rights Watch report released last year said mine operators in Goa and Karnataka had contaminated vital water sources for drinking and irrigation.

The repeated scandals in the mining sector have shone a light on the government's management of natural resources and the nexus of corruption that exists between regulators, politicians and business owners.

Separately on Thursday, the Supreme Court said a ban on bauxite mining in eastern Orissa state would continue for now.

The court gave three months to the local village council to decide whether a disputed mine by resources giant Vedanta should go ahead in the Niyamgiri Hills, considered sacred by its tribal population.

The project was intended to supply up to 150 million tonnes of bauxite to Vedanta Aluminium, a unit of London-listed Vedanta Resources.

The plant has been shut since late last year due to shortages of the raw material.

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http://www.globalpost.com/dispatch/news/afp/130418/indias-court-allows-reopening-iron-ore-mines