Leases not renewed but deemed so, mining goes on

Debabrata Mohanty Posted online, Deccan Herald: Fri Nov 09 2012,

Bhubaneswar : As in Goa, where the deemed extension of mining leases was at the heart of a mining scam, in Orissa too such deemed extension gave leaseholders an open season while also putting them at the mercy of government officials.The deemed renewal of a lease allows the holder to continue extracting ore even after the expiry of the lease, while it waits for renewal. In September this year, the M B Shah Commissionpointed out how over 60 mines in Goa were on a “deemed extension” and led to illegal mining.In Orissa, where the steel and mines department has sent showcause notices to holders of 103 leases because of excess mining of iron ore and manganese to the tune of Rs 68,000 crore between 2000 and 2010, 215 mines are at present working on a “deemed renewal” basis. All the 103 leases involved in the showcause notice are deemed renewed, a senior official of the steel and mines department said.Deemed renewal is granted under rule 24A(6) of the Mineral Concession Rules, 1960. Under the rule, the miner’s application for renewal of his lease should be pending with the government before expiry. It is also necessary for miners to have all statutory clearances under the Forest Conservation Act, the Environment Protection Act, the Wildlife Protection Act, the Water Act and the Air Pollution Act when seeking and being granted a deemed extension.

A central empowered committee of the Supreme Court, which probed violations of several provisions of FC Act during its investigation into the Orissa mining scam in 2010, found that 215 mines had not got their leases renewed for 10 to 20 years and continued on a deemed renewal basis.

“Deemed renewal was an exigency provision in the MC Rules. The government should have either accepted or rejected the mining lease renewal applications within a reasonable period of six months to one year,” said the top executive of a mining company, unwilling to be named. “But instead they were kept pending, which helped government officials collude with some of the miners to allow them to mine beyond their limits.”

At the Orissa Mining Corporation’s Khandabandh iron ore mines in Keonjhar, spread over 294.53 acres, the lease expired in November 1993. Though the OMC filed its first renewal-of-lease application for a period of 20 years in November 1992, it is yet to be renewed and the mines have continued to run on “deemed renewal” for 19 years. None of the steel and mines officials The Indian Express spoke to was willing to comment why mines were being allowed to run on such extensions for years together.

The state forest and environment department too contributed to excess mining when the mines were on deemed renewal. In May 2011, the department recommended the diversion of 390 hectares of forest land in the Sarkunda iron and manganese mines of Sundargarh district for Feegrade & Co. Official documents show that the lease area contained 3.208 million tonnes of iron ore and 1.629 million tonnes of manganese ore, and the company was allowed to mine 0.98 million tones every year. The extraction would have exhausted the mine in just four years. The mining hardly helped locals as the company’s own application for forest clearance said it would give jobs to only 20 people.

The Orissa Pollution Control Board, which gives consent-to-operate (CTO) certificates under the Water and Air Pollution Control Acts for a period of five years, too granted such certificates to miners whose leases had been deemed renewed. Under the laws, no mine can operate if the CTO has not been obtained or not been renewed after its lapse. A CTO certificate is also a prerequisite for environment clearance from the Ministry of Environment and Forests.

Usually, the CTO is issued for a specified period and is subject to compliance with various conditions imposed by the board. The OPCB in a letter dated February 4, 2011, said mining activities may not be stopped just for the want of a CTO certificate from the State Pollution Control Board. The letter, addressed to the Eastern Zone Mining Association, stated that consideration of consent to operate beyond May 31, 2011, would take some time but unless consent has specifically been refused, it may be assumed that the application for consent to operate was under active consideration.