Supreme Court tells Centre to decide on POSCO’s mining license


Fri, 10 May 2013

By Newzfirst 5/10/13

New Delhi – The Supreme Court on Friday set aside the Orissa high court order which had quashed state government‘s petition to allot iron ore license to South Korean steel major POSCO in Khandadhar hills in Sundergarh district for a multi-crore steel plant.

A bench headed by Justice R M Lodha asked the Centre to consider all the objections raised by various parties pertaining to the mega steel plant and take a decision.

The court was hearing cross appeals filed by the state government and a mine and mineral company challenging the Orissa high court’s order on the issue of iron ore mines.

The state government of Orissa and Geomin Minerals & Marketing Limited had challenged the orders of the Orissa high court which had quashed the notification issuing iron ore mining in over 2,500 hectares in the Khandadhar hills in Sundergarh district to POSCO.

The high court, on July 14, 2010 on the petition of Geomin Minerals, had set aside the state government’s decision.

Geomin Minerals had contended before the high court that it had applied for the prospective licence for Khandadhar iron ore mines much before POSCO.

The High Court had set aside the notification issued by state government in 1962 reserving all mineral bearing land for exploitation within Orissa and take a fresh decision on it.

The high court had further said that all mineral bearing land reserved by the state government prior to 1987, without the approval of the central government would not be deemed to have never been reserved.

The Orissa government, which had moved the apex court, on October 29, 2010 on this issue, had contended that the high court could not have quashed the state government’s grant of licence to POSCO as it was under section 11 (5) of Mines And Minerals (Development And Regulation) Act, 1957.

The Orissa government had further contended that Section 11 (5) gives power to the state government to “grant a reconnaissance permit, prospecting license or mining lease, as the case may be, to an applicant whose application was received later in preference to an application whose application was received earlier”.

The state government in January 2009 had recommended POSCO to the central government for granting prospective licence for Khandadhar iron ore reserves.

This was challenged by Geomin and later 16 other firms who have also applied for mining leases also intervened.

Geomin, in its petition, had submitted before the apex court that the high court “does not take into account the pleading made by it” and “has traversed beyond the pleadings and prayer made by it”.

(PTI)

 

#India-Mining Ministry’s Zero Loss Theory


In an elaborate cover-up, the Ministry of Mines is working behind the scene to save politicians and industrialists involved in illegal mining in Odisha
Prakhar Jain

January 10, 2013, Issue 3 Volume 10

Photo: Getty Images

HOW DO you defeat attempts to punish corruption? For the Union Ministry of Mines the answer is simple: set up a commission and then sabotage it.

TEHELKA has documents to prove that top officials in the mining ministry, which set up one such commission to investigate illegal mining, are working behind the scenes to dilute cases against politicians, industrialists and bureaucrats who are likely to be indicted in the commission’s report.

The matter pertains to the excessive mining of iron ore in Odisha, which the state government has already acknowledged as being illegal in several ways. However, the mining ministry has been trying its best to make the unlawful lawful by converting cases of illegality into irregularity.

The attempts at cover-up have speeded up as the former Supreme Court judge Justice MB Shah, tasked with probing illegal iron ore and manganese mining across the country in 2010, is expected to submit a voluminous report by the end of January.

Documents in possession of TEHELKA show that none other than the then mining secretary, Vishwapati Trivedi, was involved in the cover-up of the scam which, going by even the conservative estimates of Odisha government, caused a loss of 70,000 crore worth of natural resources. Calculated by market rates, the scam might rise to a staggering 3 lakh crores.

Seeds of the scam were sown in the beginning of the last decade when China started importing iron ore in huge quantities to build necessary infrastructure for the Beijing Olympics. As prices of iron ore skyrocketed, mining companies across the nation scrambled to exploit the opportunity.

According to the mining laws, no mineral can be extracted from ground without the prior permission of government. However, taking advantage of a loophole, mining companies in Odisha manipulated the law in connivance with bureaucrats and politicians, and started exporting an unprecedented quantity of iron ore. The companies include those associated with the Tata and the Birla groups.

The scam came to light after the 2009 state Assembly elections, when Rabi Das, the editor of a local Odia newspaper, started investigating into the campaign expenditure of two major political parties following the poll. The money was traced back to illegal mining. This prompted Das to file a case in the Supreme Court, forcing the state government to stop all major mining activities in the state.

When similar such cases were reported from Bellary and Goa, the Union mining ministry asked Justice MB Shah to inquire into the illegal mining of iron ore and manganese across the nation. In the following months, the ministry initiated the coverup by going to the extraordinary length of amending the rules and interpreting the laws to benefit the case of the criminals.

The ministry even sabotaged the Odisha government’s attempt to recover the price of ore mined illegally. Three days after the state decided the modalities of computing the penalty last July, the ministry changed the definition of illegal mining by issuing a notification and amending a rule through which a mine is allocated.

The notification read, “…violation of any rules… within the mining lease area by a holder of mining lease shall not include illegal mining.” It also selectively interpreted what would constitute “an area held with lawful authority” and says that a mining lease area shall be considered as an area held with lawful authority while determining the extent of illegal mining.

In addition to the notification, to leave no doubt about the ministry’s intention, a letter was written two months later by Trivedi to the chief secretary of Odisha. The letter stated, “…the interpretation that a land granted under a mining lease by the state government can be held to be occupied without lawful authority on the grounds of violation of provisions of any other law of the land is not appropriate and such interpretation may not stand in the Court of law.”

The letter went on to suggest that if other laws like the Environment (Protection) Act and the Forest (Conservation) Act have been violated by the miners, penalty can be imposed under those Acts and not under the law governing mining in the country. This distinction, Trivedi wrote, may also be clarified to the State Accountant General.

Since most of the illegal excessive mining in the state happened in lease areas (mostly under the grossly misused provision of ‘deemed extension’ when the process of renewal of mining leases is pending) the notification and the letter dealt a huge blow to Odisha. Under the mining laws penalty can be recovered only when mining is done illegally and without the authority of law. The ministry, therefore, killed all chances of recovering the loss caused due to illegal excessive mining of a major mineral.

However, under huge political pressure, the state government went ahead with issuing show-cause notices to the miners in October last year for recovering almost Rs 70,000 crore for “illegal” production of iron ore “without the authority of the law”.This was despite the state government knowing that it would hardly be able to recover a single penny if the show-cause notice were challenged in a court of law.

Covering the tracks Those involved in illegal mining in the state include companies associated with the Tatas and the Birlas, Photo: AP

The companies, as expected, have challenged the notice before a revision authority working under the ministry of mines. Some industrialists have also approached the courts disputing the order, saying that the extra ore mined by them can at best be called an irregularity and not illegality.

Trivedi, however, defends the notification and his letter to the chief secretary. He says that the notification was issued in consultation with the law ministry, after the interim report of MB Shah Commission recommended that the laws against illegal mining be made stronger. “The miners in Odisha had a valid lease and therefore were not holding the area without lawful authority. Those proved to be mining beyond the lease area, which is illegal, will not be able to get mining lease in future because of the notification,” he says.

He further argues that the miners cannot be penalised under the mining laws for not having clearance under the environment and the forest laws. “And there is no limit to the ways in which a law can be interpreted. If someone disagrees with the ministry’s interpretation, then it would be best to let the courts decide,” he says.

Activists in the state blame the politicians for this cover-up. “A large number of senior politicians from the ruling Biju Janata Dal (BJD) and the Opposition, the Congress party, are deeply entrenched in the mining business. If the fine is recovered, they would get devastated,” says Rabi Das.

Biswajit Mohanty, a member of Transparency International, an international civil-society organisation, has filed a public interest litigation challenging the ministry’s notification. He describes it as “colourable exercise of rule-making power, which suffers from the vice of arbitrariness”.

Niranjan Patnaik, the state Congress president, who has indirect interest in the business through his relatives, also slams the fine and says that mine owners have only mined more ore from their leased areas and alleges that nobody is touching the illegal extraction by mafia/mafias who were working under the patronage of BJD leaders. “In comparison to what the mine owners have done, these mafias have extracted and sold 100 times more iron ore. Even the Shah Commission has not gone beyond the leased areas to investigate the real theft of minerals,” he says.

It would be interesting to see whether the Shah Commission is able to catch the real culprits behind the mining scam or gets hoodwinked by the systematic efforts of the bureaucracy to project that there is not scam at all.

prakhar@tehelka.com

 

Karnataka mining scam may have cost exchequer Rs 50,000 crore #Indiashining


 

NEW DELHI: The scale of the Karnataka mining scam seems to be getting bigger with the estimates of an expert committee suggesting that the alleged robber barons who engaged in illicit mining may have cheated the state of Rs 50,000 crore in taxes and other levies.

The mining syndicate which thrived across regimes claimed that it was taking out just 50 million tonnes of iron ore every year whereas inspections showed that in reality, another 30-40 million tonnes of ore was illegally mined and siphoned off.

Considering that the recent e-auction for just 26.58 million tonnes brought in Rs 1,496 in various levies, the loss to the state exchequer works out to Rs 7,000 crore every year over the last one decade.

The Supreme Court’s environment panel, Central Empowered Committee (CEC), submitted its report to a bench of Justices Aftab Alam, K S Radhakrishnan and Swatanter Kumar on Thursday and said till July 31, 26.58 million tonnes of iron ore was sold through e-auction for Rs 6,416 crore.

“In addition to the sale price, about Rs 1,496 crore has been recovered and paid by the monitoring committee to the government — Rs 606.24 crore as royalty, Rs 594.06 crore as forest development charges, Rs 270.65 crore as VAT and Rs 25.11 crore as CST,” said the report submitted to the court by CEC’s member secretary M K Jiwrajika.

CEC sources said if the private lease holders had sold the iron ore for Rs 6,416 crore, then they would have paid income tax of over Rs 2,100 crore to the government. So, along with the various levies, the government would have got almost Rs 3,600 crore from the entire transaction.

Before the apex court banned mining completely, private lease holders had declared sale of 50 million tonnes of iron ore per year on an average and inspection showed that another 30-40 million tonnes of ore was illegally mined and siphoned off.

If sale of the total 80-90 million tonnes of iron ore was shown as legal by the private parties every year, then they would have earned around Rs 18,000 crore, over which income tax would have been Rs 6,000 crore. In addition, the government would have got nearly Rs 1,500 crore as royalty, FDC, VAT and CST. This means the government would have got around Rs 7,500 crore every year. But what the government actually got was only around Rs 500 crore from the private parties.

Thus, an estimated loss of Rs 7,000 crore to the exchequer per year happened for nearly a decade and CEC sources said the entire illegal extraction of iron ore and under-reporting of sale and extraction could have cost the exchequer Rs 50,000 crore.

The bench asked the Karnataka government to file its response to the CEC report after amicus curiae Shyam Divan and A D N Rao informed the court that the reclamation and rehabilitation plan for 16 mines had been prepared. But the bench insisted that it would permit resumption of mining in these mines only after the rehabilitation plan was implemented on the ground.

To make available adequate quantity of iron ore for iron and steel plants dependent on the ore extracted from Bellary-Hospet, Tumkur and Chitradurga districts, the bench sought an update from NMDC, which alone has been allowed by the court to undertake limited mining operations.

Senior advocate Arvind Datar, appearing for NMDC, said the PSU had the capability to extract 10 lakh tonnes of iron ore but it faced problems in transporting the extracted mineral and lack of assured long term demand.

The Karnataka Iron and Steel Manufacturers Association and Federation of Indian Mineral Industries through senior advocates C S Vaidyanathan and T S Andhyarujina said their clients were ready to lift the mineral. The bench asked representatives of industry associations, ministry of environment and forests (MoEF) and NMDC to sit with the CEC on Monday to chalk out long-term e-auction scheme and place it before the court on August 17.

dhananjay.mahapatra@timesgroup.com

 

448 mining trade licences suspended for 15 days


TNN Apr 4, 2012

PANAJI: The mines and geology department on Tuesday suspended more than 448 mining trade licences for the next 15 days pending verification of documents.

Director of mines Prasanna Acharya said, “After consulting with advocate general Atmaram Nadkarni on the suspension of trading licences, we have issued a common order under the Mining Regulation Act for the suspension to all mining traders in the state.”

The mines department has given a 15-day time limit to all traders to submit the necessary documents to show that they are genuine traders and not involved in illegal mining activities.

“We have to verify record to see who are allegedly involved in illegal mining,” Acharya said. The verification of documents will commence from Wednesday.

“If they are not found to be genuine we will have no option but to take necessary action,” said Acharya. The mining department will study the documents case by case. If the documents are not genuine then their licences will be revoked,” said Acharya. The mining department has also included the traders registered during the election period.

The department has planned to launch a software which can be used by both Goa Minerals Ore Exports Association (GMOEA) and the department to tally production and exports of iron ore from the state. “We have planned to ensure that there isn’t a single tonne’s difference between the production and exporters’ figures from the department and GMOEA from this year onwards. In a week’s time we will have the software,” he added.

The mining department is also exploring the possibility that they can act under the mining regulation to impose certain restrictions banning new trucks or fixing a deadline by which truck owners must register with the department.

“We are exploring the possibility of issuing commercial badges for mining truck drivers,” he said

The new director has also directed the mining department staff to streamline records and if necessary they can approach mines owners to get the records if they are not available with the department for certain reasons. The government also issued orders to cancel the extension of assistance technical officer of mining department Hector Fernandes.

Chhattisgarh Vs Jayaswal throws light on murky mine sector


 In a petition filed in the Delhi high court, the state alleges that the firm forged papers to get iron ore mining lease

Ruchira Singh reports in Mint

New Delhi: The Chhattisgarh government has filed a writ petition in the Delhi high court against the Central government over Jayaswal Neco Ltd’s applications for mining leases in a case that throws light on the murky world of mining in India.

The state alleges that the mid-sized steel-maker forged documents in its application to get iron ore mining leases in Rowghat in Bastar district and that the Union government directed it to consider the application favourably—even after the state showed investigative reports that said Jayaswal Neco had allegedly faked paperwork to show it had conducted prospecting (preliminary exploration) in Rowghat when it had actually not done so.

Neither the company secretary of Jayaswal Neco nor India’s mining secretary responded to e-mails or phone calls seeking comment.

India’s mining sector has been in the spotlight over allegations of rampant illegal mining and activists, government officials and company executives have spoken about the opaque way in which many leases are issued and the way some unscrupulous miners secure their interests.

The Jayaswal Neco case, which will be heard on 30 April, may reveal the inner workings of miners and government officials—especially if the court finds the allegations contained in the 205-page petition to be true.

At stake are iron ore deposits of 280 million tonnes (mt) valued at over Rs. 80,000 crore, in
Rowghat iron ore deposits A, B, C, D, E situated in the reserved forest area of Narayanpur forest division of Kanker forest circle of Bastar, the writ petition says.

Jayaswal Neco, a 1mt steel producer based in Nagpur, is listed on BSE as Jayaswal Neco Industries Ltd and has been trying to get four mining leases in the Rowghat iron ore deposits on the grounds that it had prospecting licences in 1999 and, therefore, must get preferential allotment.

These forests are Maoist territory, but are nonetheless attractive for steel companies given the shortage of mineral resources in the country. Tata Steel Ltd, also eyeing the deposits, impleaded itself in the case and has been named respondent number three, after the Union government and Jayaswal Neco.

“Any deposits in that area are valuable because of the proximity to steel plants (in east India) as well as the general quality of the ores,” said Ravindra Deshpande, metals analyst at Elara Securities (India) Pvt. Ltd.

Rowghat’s deposit F belongs to Steel Authority of India Ltd’s Bhilai Steel Plant, and amid security fears, the company has retained Chhattisgarh State Power Transmission Co. Ltd and the railways to create the required infrastructure before developing the mine.

Prospecting claims

Jayaswal Neco’s prospecting licences (PLs) for a total of 1601.47 hectares in and around Rowghat’s deposits A to E, were valid for up to two years and in 2000 the company made an application to the Chhattisgarh government asking for mining leases (ML) in the very same areas claiming preferential rights under the Mines and Minerals Development and Regulation Act (MMDR Act), the writ petition shows.

Till 2006, its applications remained in the initial stages. Then, the divisional forest officer, Narayanpur, informed the state’s mineral resources department that Jayaswal Neco had not undertaken any prospecting operations. The department’s suspicions were further aroused, the writ shows, when state government officials scrutinizing Jayaswal Neco’s application found references to the “state government of Chhattisgarh” in back-dated papers. Chhattisgarh had not been created at the time (the state was formed in November 2000).

In 2007, the state government rejected all applications after Jayaswal Neco failed to provide proof justifying its claim.

“As prices of iron ore had started rising, there was a lot of pressure from companies to get mining leases,” said an official in the Chhattisgarh government who did not want to be identified.

Jayaswal Neco filed a “revision application” with the appropriate authority in the central government’s mines ministry. “With their revision application, respondent number two (Jayaswal Neco) filed photocopies of two letters dated 20.1.2000, purportedly having been written by the Conservator of Forest (CF), Kanker Forest Circle to the Divisional Forest Officer, Narayanpur, conveying permission for prospecting operations in 186 ha and 388 ha of PL areas,” the writ says. “However, no such letters were ever issued by the CF, Kanker, which are prima facie and to our belief, forged documents.”

The state government wrote to the secretary of mines for instituting an inquiry by the office of the controller general, Indian Bureau of Mines, in Nagpur.

“Chief Vigilance Officer (CVO) of the Mineral Exploration Corporation Ltd. (MECL)/Indian Bureau of Mines (IBM) conducted an inquiry into state government’s complaint and submitted a detailed report to the ministry of mines confirming that the alleged irregularities had in fact been committed in the Office of Regional Controller, IBM Nagpur,” the writ says. “In the CVO’s report, prospecting reports submitted by respondent number two were found to be ante-dated and acknowledgements issued by the Office of Regional Controller, IBM, Nagpur to respondent number two, to be forged,” it adds.

Centre’s role

Read full article here

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