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Who said India top companies aren’t involved in illegal mining?

Who said India Inc’s top companies aren’t involved in illegal mining?
A Supreme Court panel has indicted a Birla group company for illegal mining in Odisha.

Photo Credit: Sam Panthaky/AFP
In popular perception, illegal mining is the work of unknown, unscrupulous individuals and firms operating on the margins of India’s formal economy.The reality is, however, less palatable.

Large, well known corporations are often complicit in widespread illegalities in the mining sector.

This week, Essel Mining and Industries Limited, part of the $40 billion Aditya Birla group, was indicted by an expert panel tasked with investigating mining violations in Odisha.

In a report submitted on Friday, the Central Empowered Committee, an expert panel that reports to the Supreme Court, held Essel Mining guilty of illegal mining in the forest areas of the state.

“Illegal mining in the forest area included in the mining lease has been undertaken on a massive scale by the lessee,” said the report, “and that too spread over a large number of years.”

Violations by Essel

Essel has five mining leases for iron ore and manganese in Odisha.

To start with, the CEC notes that the leases add up to more than 10 square kilometers of land, which amounts to a violation of the limit currently prescribed by the mining law.

Further, the company has mined 19.68 million tonnes of iron worth Rs 1,102 crore without an environmental clearance or in excess of it.

In the case of the Kasia mine, the CEC found the company was mining outside the sanctioned mining lease area.

However, the most important finding of the CEC relates to mining operations carried out by the company in forest areas.

In 1980, the Forest (Conservation) Act was passed. It made it mandatory for mining companies to seek clearance before mining in forest areas. Existing mines needed to get the clearance at the time of renewal of mining lease.

The CEC has found that Essel Mining Ltd continued operations in two mines – Kasia and Jilling Langalota – despite not having the requisite forest clearance in place.

No forest clearance

In Jilling Langalota mine, mining operations were carried out for more than 21 years without forest clearance. According to the state forest department, as much as 286 million tonnes of iron ore was extracted during those years, which was worth Rs 13,898 crores.

In Kasia mine, between 2005 and 2010, the company mined nearly 100 million tonnes of iron ore worth Rs 3,101 crore from forest land without clearance. The estimate could have been higher if the ore extracted during the1980s and 1990s was taken into account, but the CEC notes that the data for those years is missing. In addition, the CEC found that 18 hectares of virgin forest land, which lay outside the cleared area, was used by the company for mining and related activities.

A spokesperson of Essel Mining declined comment on the CEC’s findings. “The matter is sub-judice,” she said, speaking on the phone with Scroll.in.

If the Supreme Court accepts the CEC’s findings and recommendations, the company could lose both the mines. The CEC has recommended that the two leases not be renewed in the company’s favour. “Instead both the leases may be directed to be assigned through transparent competitive bidding process,” it said.

The CEC has also recommended that the company be made to deposit 70% of the value of the ore mined without forest clearance in a government fund that can be used for the development of the area and the welfare of local tribal communities.

Other violators

Illegal mining has been a political hot potato in Odisha ever since the Justice M B Shah Commission estimated that iron and manganese worth nearly Rs 60,000 crore was extracted in violation of the law in the state over the last decade. The commission’s final report, tabled in Parliament in February 2014, recommended that the state government recover Rs 60,000 crore from the mining companies.

Public interest groups have filed petitions in the Supreme Court asking it to direct the state government to act on the Shah Commission report.

The Supreme Court, in turn, sought the view of the experts of the CEC set up under the Ministry of Environment and Forests.

The CEC report is, therefore, crucial. It is likely to inform the final judgment of the court.

While the CEC has upheld several of the findings of the Shah Commission, it has taken a more conservative view on the amount to be recovered from companies. In the case of companies that have mined without forest clearance, like Essel Mining, it has recommended recovery of 70% of nominal value of the mined ore. But in the case of companies that have mined without an environmental clearance or in excess of it– a list that includes private sector giant Tata Steel and state company Orissa Mining Corporation – it has limited the recovery to 30% of the nominal value of the mined ore. This comes to Rs 17,091 crore for iron ore and Rs 485 crore for manganese.

The CEC has also refrained from making any recommendations in the case of controversial Thakurani B mine. As reported by Scroll.in, Jindal Steel and Power Limited, another of India’s large and influential private mining corporations, stands accused of indirectly controlling the mine, in violation of the law. A company spokesperson had denied the allegations at the time of the story’s publication.

Examining the case, the CEC has put on record its view that JSPL’s arrangement with the company officially holding the lease is “brazenly illegal” and has caused losses to the state running into several thousands of crore rupees. But it has refrained from making any recommendations in the case in view of an order obtained by the company in the Supreme Court earlier this year, limiting the CEC probe to environment and forest violations. A legal technicality has allowed JSPL to escape the fate of Essel Mining Limited.

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Comment (1)

  1. Communal Award

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