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.

Orissa imposes penalty on ‘errant miners’



Debabrata Mohanty : New Delhi, Fri Nov 02 2012, 00:35 hrs

After Karnataka and Goa, Orissa has emerged as the third state to crack down on alleged cases of mining irregularities. With the MB Shah Commission now looking into multi-crore mining scam in the state, the Orissa steel and mines department has slapped a penalty of Rs 23,904 crore on 27 miners in just one mining circle of the mineral-rich Keonjhar district for extraction of ore beyond the permissible limits.

Among those who have been slapped with the penalty notices are Tata Steel, Aditya Birla-owned Essel Mining and the state-owned Orissa Mining Corporation.

The deputy director of Joda mining circle, Ballabh Nayak said the Tata Steel is the biggest violator among all leaseholders and has been asked to pay Rs 6,265 crore. Others who have been charged are Essel Mining (Rs 4,530 crore), RP Sao (Rs 3,872 crore), Sarada Mines (Rs 2,845 crore), KJS Ahluwalia (Rs 2,022 crore), Serajuddin & Co (Rs 1,983 crore).

The penalty would be recovered within 30 days of the notice issued by the mines department. The companies would also have to pay simple interest at the rate of 24 per cent per annum on the sum towards the price until they fully pay the price of the minerals. Officials said after Joda, such penalty amounts would be raised in other mining circles of the state.

There was no reaction from any of the leaseholders about the penalities imposed on them, but a senior mines department official said the order would “not be tenable”. “It would be challenged in court as previously such orders have not passed muster,” he said.

After being accused of “inaction” for last 3 years after the mining scam broke way back in 2009, the steel and mines department in July this year had first issued notices to 190 companies, seeking the value of the ore extracted over and above the permissible limit.

 

#India-Keonjhar tribals up in arms over #mining plans in Khandadhar #Vedanta #Posco


TNN | Oct 30, 2012

KEONJHAR: Fear of displacement stalks tribals inhabiting Banspal block of Keonjhar district abutting the beautiful Khandadhar waterfall with hundreds of companies, including South Korean steel behemoth Posco, applying for lease to mine the Khandadhar hill. A Niyamgiri-type agitation (against Vedanta in Lanjigarh) is already on in the area.

Sources said only two mines, owned by Odisha Mining Corporation (OMC), are operating in Malangtoli region near the hill as of now. Posco has applied for mining lease (ML) over an area close to the waterfall. The hill is about 65 km from Keonjhar. On the opposite side of the hill there is another waterfall by the same name in Banei sub-division of Sundergarh district, where too tribals are protesting against the proposed mining activities.

According to the information obtained from mining department through an RTI query, about 219 prospecting licence (PL) applications are pending with it. Companies and individuals have applied for lease over 1,31,406.8881 hectare of land in 52 villages. Similarly, about 237 ML applications on 1,43,895.2357 hectare are pending with the department. According to the department, no ML has been granted to any company as yet. “Only eight companies have been granted PL in the vicinity of Khandadhar hill,” said Keonjhar mining officer D K Parija.

Surrounded by dense forests, the area is known as the ‘rice bowl’ of tribals, mostly Bhuyans, as they depend on it for their livelihood. They have united under the banners of Khandadhara Surakshya Mancha and Lok Sangathan and have been fighting to save the forest and their livelihood.

“We depend on the forest for our livelihood for over six months a year. Medicinal plants, streams, wildlife, a temple and the beautiful waterfall will be destroyed if mining is allowed here,” said Radhakant Dehury, a Bhuyan tribal of Kadakala area. Mining will not only lead to heavy pollution but also damage the Shiva temple, worshipped by thousands of locals, he said.

 

#India- No Mining ,No Vedanta #Indigenous #Tribal #mustwatch


The struggle of common people continuing. Niyamgiri hill or alternate mining areas are being protested for bauxite mining from Bhawanipatna of Kalahandi district to Gatamalli hill of Rayagada.’NO Mining-No Vedanta‘if this voice of the people is not emphasized in the mainstream media than also people are voicing against mining.it is impossible to run the Langigarh Vedanta project without availing Odisha mining.company’s top official said.their last hope is Niyamgiri hill,because the paper works for first phase for alternate mining has not yet been ready of Odisha mining corporation is passionately waiting for the last decision by supreme court for Niyamgiri. which has been well understood by the protesters.that’s why the common-man are raising their voice’NO MINING,NO VEDANTA’……

#Vedanta to close Lanjigarh refinery on Dec 5 #goodnews


 

Times of India, Sept 7, 2012
Rajaram Satapathy
BHUBANESWAR: With no bauxite in hand and mines stuck under regulatory issues, the Vedanta Aluminium Ltd (VAL) has decided to shut down its refinery at Lanjigarh in Kalahandi district. VAL president and Lanjigarh plant’s chief operating officer (COO) Dr Mukesh Kumar on Thursday intimated the state government that the factory was no more in a position to run and would be closed from December 5.
VAL’s decision is bound to send a wrong signal amongst the prospective investors that mineral-rich Odisha, contrary to the claims of the state government, is far from welcoming industries. The VAL staff carried Kumar’s letter addressed to the labour and employment secretary and handed over in the respective department. Copies of the letter were also given to the chief secretary, industry secretary and director of factories and boilers. “Such a big investment in the state is in jeopardy. No one in the government seems bothered. Our people wanted to meet the secretaries, but were told that they had no time,” said a senior VAL official.
Anil Agarwal‘s VAL is the only private industrial house to have invested more than Rs 50,000 crore in Odisha for setting up the integrated alumina, aluminium complex. This included 1mtpa refinery at Lanjigarh due for expansion to 6 mtpa capacity 70 per cent work on which has already been completed, 1.75 mtpa capacity aluminium smelter, 1215 mw captive power plant and 2400 mw independent power plant, all at Jharsuguda. “In retrospect we feel it was a bad decision to go for such huge investments here,” remarked a senior VAL official. Kumar’s letter blamed the state government for not doing enough to provide raw material, bauxite, for the refinery leading to its closure.
“VAL had set up the refinery entailing huge investment in a specific background wherein the government of Odisha had agreed to supply bauxite,” the letter said, adding detail studies were undertaken on various aspects before signing the final MoU on 7th April 2003 for setting up the refinery. “It is only on the basis of the MoUs and agreements with the government of Odisha for supply of bauxite that VAL agreed to set up an alumina refinery at Lanjigarh,” the letter said. Elaborating, the VAL said it had in the past several years has submitted 26 applications to the state government for prospective license/mining lease of bauxite. “Unfortunately none of the applications could be processed and forwarded for allotment of bauxite mines,” the company’s letter stated.
Kumar’s letter highlighted how VAL finding the government not keeping its promise for supply of bauxite had desperately tried to source raw materials from different other places including going for imports at high costs. But nothing seemed helping the plant providing livelihood to hundreds of families run smoothly. “As such, it has become difficult to sustain operations without causing damage to the plant, equipment and machinery. The unit has already incurred financial losses to the tune of more than Rs 2500 crores,” the letter said adding that Lanjigarh factory was built exclusively with ‘low pressure and low temperature technology to treat bauxite available only in the Eastern Ghats and mostly in Odisha.’ The VAL said the prevailing situation has left it with no choice but to take such a ‘painful’ decision to close down the factory as ‘further operation is not feasible’.

 

No plan to shut down Lanjigarh refinery, says VAL MD #Vedanta


BS Reporter / Kolkata/ Bhubaneswar Aug 25, 2012, 

The Vedanta Aluminium Ltd (VAL) has no plans to shut down its one million tonne alumina refinery at Lanjigarh, which is currently facing acute shortage of raw material to run the plant.

“We have no plans to shut down the refinery. We are running the refinery with depleted stock of bauxite. The stock is likely to run out soon and may impact the operation”, S K Roongta, managing director, VAL told newsmen after emerging out of a meeting with the state chief secretary B K Patnaik.

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He said, there are very few bauxite mines outside Odisha. Though the company is making efforts to source the raw material from various states but there are logistic problems.

“Our Lanjigarh refinery was designed keeping in view the bauxite reserves in Odisha. But we have not been able to source bauxite from the state till date”, he added.

Asked if he apprised the chief secretary of the problem, Roongta said, “The meeting with the chief secretary was just a courtesy call.”

On whether the company had any contingency plan to tide over depleting bauxite stock, “There is nothing we can do if bauxite is not available.”

The refinery is currently running at 40-50 per cent capacity with per day bauxite consumption being 5000 tonnes a day.

“Three months back, we had got 245,000 tonnes of bauxite from Gujarat Mineral Development Corporation (GMDC) which was stocked at Vishakapatnam. The stock is gradually drying up”, the official stated.

After being denied access to bauxite mines at Niyamgiri, the company wholly depended on supplies of bauxite from other states to keep its refinery operations afloat at Lanjigarh.

Before setting up its refinery at Lanjigarh, Vedanta had entered into an agreement with state-run Odisha Mining Corporation (OMC) for supply of bauxite.

But attempts to mine bauxite at the ecologically sensitive Niyamgiri hills under OMC’s leasehold were red flagged by the environment ministry that had scrapped the Stage-II forest clearance on August 24, 2010.

Of late, the company was unable to get bauxite from Gujarat as GMDC had not issued any tender recently. Besides, private miners in Gujarat were increasingly banking on exports of bauxite to fetch better returns, the VAL official informed.

Bauxite mines in neighbouring Jharkhand and Andhra Pradesh were bogged down by regulatory issues and this has hit supplies, he added. To run the one million tonne per annum (mtpa) refinery plant at full steam, VAL needs 300,000 tonnes of raw material every month.

Owing to its total dependence on externally sourced bauxite, VAL has hitherto piled losses to the tune of Rs 3000 crore.

VAL’s Lanjigarh refinery as well as smelter and captive power plant (CPP) complex at Jharsuguda has seen grounding of investments of Rs 50,000 crore. The company’s smelting facility and CPP engage more than 15,000 people.

Jairam Ramesh calls for freeze on fresh mining in worst Naxal-affected regions #Goodnews


 

Urmi Goswami, ET Bureau Aug 24, 2012, 
(Ramesh has pitched for a…)

NEW DELHI: Rural Development Minister Jairam Ramesh has pitched for a moratorium on new mining projects in the worst Naxal-affected regions and particularly in areas recently recaptured from insurgents, saying it was essential to quell the Maoist problem wreaking havoc across much of India’s hinterland.

Tribal affairs minister Kishore Chandra Deo had earlier made this suggestion. In comments certain to draw the ire of industry, parts of which already view him as anti-development, Ramesh also said mining was part of the problem, and called it one of the key issues contributing to the Maoist stranglehold over mineral-rich forest areas

“There should be a 10-year moratorium on new mining in the worst Naxal-affected areas, particularly those areas which have recently been liberated from Maoist control and where we need to re-establish the presence of the state, improve governance and ensure that Maoists don’t regain the foothold,” he told ET in an interview.

Ramesh said that mining as it has been and is being undertaken was “neither ecologically sensitive nor socially inclusive”. He said it had aided Maoists gain control over large swathes of central India’s tribal belt, as he argued that it was essential to address issues arising from mining activities if the state is to consolidate and re-establish its presence in the Naxal-affected areas.

A moratorium on mining, Ramesh said, will buy the central and state governments time to first provide the basics in tribal areas and then help equip the local population to be able to participate in economic activities such as mining.

“What we need to do is build up the skill set of the local population, improve governance, and train the local people so that they are in a better position to participate in this economic activity,” he explained.

“If you have a free for all for mining in these areas, given that our track record in mining has been so disastrous, what you will have in the initial years will be that all the jobs (skilled and semi-skilled) go to outsiders and the menial jobs will be done by the locals.”

Such a situation would over time breed resentment among the locals and end up becoming a recruiting sergeant for the Naxal cause, he added. Limiting mining activity would also help cut off a key funding source for the Maoists, whom Ramesh described as being fuelled by “levy and not ideology”.

“The moment you expand mining activities you will find a proliferation of groups operating under the garb of Maoist ideology, but who are basically extortionists,” he said.

With his stance on mining, Ramesh is potentially placing himself once again in the firing line of detractors who blame him for a lot of the country’s present economic problems.

In his previous job as environment minister, Ramesh pushed a policy demarcating forests as ‘go and no-go’ areas for mining, a move that made him a lightning rod of criticism both within and outside the government.

Other ministers and some in industry circles have blamed him and his policy for raw material shortages and resultantly a sharp drop in economic growth rates.

Coming at a time India’s GDP growth rate – at just over 5% – is hovering at levels unseen in a nearly a decade, Ramesh’s latest intervention on the mining issue could, for some, buttress his anti-development and anti-growth image.

But the man remains unfazed. “What is more important – social peace or growth? What use is this growth if large parts of your own territories are not amenable to any form of governance by democratically elected institutions?” he asks.

An IIT-Mumbai, Carnegie Mellon and MIT alumnus, Ramesh, says that he is not anti-growth, but there is a need for balance. “This monotheism that we have practiced since 1991 that ‘nothing matters except GDP growth’ is very unwise.

Growth is essential. There is no doubt about that,. This is not an argument for going back to worshipping a 3.5% growth rate, but what it calls for is a certain balance. It calls for making strategic choices,” he said.

Although Ramesh in his stint as environment minister succeeded in giving the ministry, long viewed as a rubber stamp department, a big public profile, his move to rural development, albeit with a promotion to full cabinet rank, was viewed in some quarters as a punishment by the Prime Minister for hobbling the cause of industrialisation and economic growth.

Given the challenge posed by the Maoists, Ramesh is confident that the Prime Minister will take this proposal under consideration. “I don’t think the Prime Minister is insensitive to these issues.

I have had extensive talks with him. Every time I go to one of these Naxal-affected districts, I brief him and I have never found him not supportive of what I am trying to do,” he said.

To his detractors who argue that he does not see the larger picture, Ramesh tosses some ancient lines of wisdom from the Bhagwad Gita, especially the one in which Krishna tells Arjuna that “it is better to die doing one’s own duty than to die doing someone else’s duty”.

“My duty is not to promote mining industry, my duty is to ensure that the process of mining does not lead to undesirable social and ecological consequences. The job of the mining minister is to promote mining, he says, adding that ultimately whether a project takes off or not depends on the wish of the locals.

“Niyamgiri didn’t work out not just because of my decision, but because the local Dongaria Konds (tribals) didn’t want it,” he says, referring to Vedanta Resources’ stalled multi-billion dollar project to mine bauxite in Orissa’s Niyamgiri hills.

INDIA -How power, metal sectors are in quagmire of indebtedness


Banking District

Banking District (Photo credit: bsterling)

 

Most loans under stress are largely in the two sectors

Shishir Asthana / Mumbai Aug 06, 2012,  BS

Moneycontrol report says Essar Steel is under stress for servicing its Rs 23,000-crore loan from banks. The company is 30 days behind schedule to make its interest payment. The report says that around 18-20 banks have provided the amount to the company, with one state-owned bank having an exposure of Rs 9,000 crore.

With over Rs 2 lakh crore of loans up for restructuring, market has been either focusing on high debts of individual companies or the entire sector, which is causing a lot of stress on banks’ financials. However, a recent report by Credit Suisse points out to the rising risk in the banking circle on account of concentration of loans to business houses.

In a report titled House of Debt, Credit Suisse points out that over the past five years while bank loan growth has been 20%, loans to 10 business groups have increased by five times. Their loan currently is equivalent to 13% of bank loans and more importantly it is 98% of banking system’s collective net worth. In terms of concentration risk, Indian banks are more risky than their Asian and BRIC counterparts. Concentration of top 10 groups to bank loans in China is 1% as compared to 13% in India.

The table shows the exposure of banks to various corporate groups. While average group debt to operating profit (EBITDA – earnings before interest tax depreciation and amortization) is 7.6 times, four of the 10 groups have an interest coverage ratio of less than one. In other words four of these groups are barely making enough profit to meet their interest payment.

Worst is that loans which are under stress are in largely the same sector (power and metals) across groups and in some cases to various companies within the same group.

Recognising their high leverage and poor profitability, these groups are looking at bringing to at asset sales under pressure from their lenders. Unfortunately the assets are all from the same sectors (cement plants/infrastructure/power) which are finding fewer buyers. In power sector each of these groups has 2,000-4,500 MW of capacities being commissioned over the next three years. These account for 70% of power plant to be commissioned by the private players and all of them face the same issues of gas/coal supplies and power purchase agreements (PPA) signed at much lower tariffs.

While market has factored in most of the issues of individual company and sectoral debt issues, inter-dependence of companies within the group, pledging of group company shares and guarantees of group companies make the issue trickier.

Vedanta made huge donations to both Congress and BJP


 

 

2012-07-28 -The cat is finally out of the bag the Vedanta group has given donation to the tune of `850 crore to the Congress party and `440 crore to the BJP. No sane person or company parts with such huge amounts without getting back something in return. There’s no such thing as a free meal.

Now it is quite clear why political parties go soft on mining companies. It is now also clear why both the major parties just seem to go through the motions when illegal mining is discussed in the assembly. You do not bite the hand that feeds you. It is quite clear why subsequent governments have turned a Nelson’s eye to illegal mining. Even if the local government is determined to take action the high command of both the parties will not allow it. In the end both the parties are happy and smug and it is the State of Goa and its people who are ultimately paying the price for these donations.

That Mining company donations to BJP or for that matter any party ruling the state will have no bearing on government decisions is something hard to swallow and will be believed only by the village idiot ! The very fact that the Vedanta group has given donations to both the main political parties makes it clear that this is not a donation based on the ideology of a political party. The donation is made on pure commercial reasons and with a quid pro quo in mind.

It is time that people wake up to the fact that mineral wealth belongs to the state and not to any political party and thus the benefits of such wealth should go to the people.

Contact Details:
Name:D C DIAS
Place:Taleigaon
Contact:

 

original post here http://www.targetgoa.com/helpd.php?id=87

 

SC-‘Claim for mining lease not fundamental right’ #goodnews


, TNN | Jul 28, 2012,

NEW DELHI: The Supreme Court has ruled that no private company can claim a right for mining leases and upheld the 2005 decision of the Jharkhand government and the Centre cancelling nine such leases.

Among those whose mining leases were cancelled included Monnet Ispat and Energy Ltd, which had signed an MoU with the state government in 2003 to set up an integrated steel plant in Hazaribagh district with a proposed investment of Rs 1,400 crore.

A bench of Justices R M Lodha and H L Gokhale said, “In view of the fact that the area is reserved for exploitation of mineral in public sector, it cannot be said that the discretion exercised by the state government suffers from any legal flaw. The area is not available for grant of mining lease in the private sector.” It added, “If the state government makes reservation in public interest with respect to minerals which vest in it for exploitation in public sector, we fail to see how such reservation can be seen as impairing the obligation cast upon the central government… No person has any fundamental right to claim that he should be granted mining lease or prospecting licence or be permitted reconnaissance operation in any land belonging to the government.”

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