Karela Fry

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Mining for trouble in Odisha

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The mining industry has been deeply mired in political corruption in various parts of India: the cases of Karnataka and Goa are infamous. An inquiry commission into mining in Odisha has been in the news for a while. A month ago, on October 9, BS reported:

Justice M B Shah Commission probing the mining scam in different states today said there were some “more complicated” cases in Odisha which required additional time for investigation.

“We have so far verified only 64 Odisha mines during five days of investigation. The delay is mostly due to involvement of some more complicated mines,” U V Singh, the team leader and Principal Conservator of Forest in Karnataka, told reporters here on sixth day of the investigation.

Singh was replying a question on the snails pace of investigation of the Justice Shah Commission, which earlier visited Odisha in December last year as part of probe.

Though the commission formally began its probe from October 4 this time, it had so far gone through only 64 of the over 140 mines to be examined by the six-member team.

“The cases are so complicated that the commission could examine four to five mines in a day,” said a member of the team adding, they were going deep into the matter before taking any decision on any particular iron ore or manganese mine.

The commission, which was scheduled to wind up its second phase investigation on October 11, could complete examination of maximum of 100 mines during the period, said a member adding, digital maps of mines, old records since 1952 were being examined by the commission.

On October 20 BS wrote in a follow-up:

The Justice M B Shah Commission of enquiry will visit Odisha yet again from October 31-November 11 to continue its investigation into cases of large scale mining of iron ore and manganese without lawful authority.

The team to be led by U V Singh, additional principal conservator of forests, Gujarat government, will consist of other members like Bishwajeet Mishra, conservator of forests (Karanataka), Saroj Sadangi, deputy chief vigilance officer- South Eastern Railway (Kolkata), G T Pandya, deputy commissioner (industries & mines), Gujarat government, Janardan Prasad, senior geologist, Gujarat unit of Geological Survey of India and A V S Prasad, stenographer of the commission.

“I am directed to request you to direct all department secretaries to keep available concerned officers during the visit to assist flow of information from files and other records. The detailed programme regrading the places of visit will be informed by U V Singh on reaching Bhubaneswar”, Sudhir S Shah, registrar of the Shah Commission of enquiry wrote to Odisha chief secretary B K Patnaik.

The commission, during its recent visit to the state from October 3-11, scrutinised records of 81 mining leases out of a total of 186 mining leases.

The commission has also sought specific details from all relevant departments to further its probe into alleged illegal mining activities in the state.

The mines department has been asked to make available all the files of the leases, first lease grant, notifications of subsequent renewals, transfer of lease (if any), copy of all registered lease deeds of all mines, details of company’s directors, details of status of lease land of all the leases and audit reports of the Accountant General.

The forest department has been asked to make available all files of leases of first notification of diversion of forest land by Government of India, details of compensatory afforestation, details of payment of net present value (NPV), copies of all proposals submitted to Government of India for diversion of forest land and lease wise details of compensatory afforestation completed.

Similarly, Indian Bureau of Mines (IBM) has been asked to keep available details of all returns filed from 2000, all mining plan approvals of all leases, all modifications issued for increased production of all leases and production details of mines since 1995.

IT continued the story:

Led by UV Singh, the principal chief conservator of forests, Karnataka, the six-member team of the commission has been zigzagging through the mining hinterland of Sundergarh and Keonjhar making pit-stops at mines run primarily by private operators. During the last two days, the panel inspected as many as eight mines in the two mineral-rich districts coming up with instances of excessive mining and excavation beyond demarcated mining areas.

The commission also rapped the mining and forest officials of the state government accompanying it for having turned a blind eye to the violation of laws by miners dropping subtle hints that the two could have been hands in glove. Sources said that among others the commission stopped at Gita Rani, Jitu Patnaik and Sirajuddin mines for spot verification. At one of these mines it found evidence of excess lifting of iron ore to the tune of two lakh tonnes between 2006 and 2008.

The commission’s team expressed dismay at the instances of mining having taken place outside the lease areas and said that they would use all their resources to go deeper into the scam. The team has also sought the balance sheets and export records of some of the mine owners.

Earlier, the commission had rapped state government officials for failing to check mining irregularities, including excavation of minerals within 10km radius of the Similipal wildlife sanctuary.

Meanwhile, a seven team of the central Public Accounts Committee has arrived in the state to inquire into allegations of irregularities in the allotment of coal blocks in the state. There have been allegations about state government having recommended allotment of some of these blocks in favour of private companies even without signing memorandums of agreement (MoUs) with them.

On November 5 BS reported the first response by the state government:

Blaming Indian Bureau of Mines (IBM) for irregularities in mining sector in the state, Odisha government today claimed it had imposed penalty of Rs 67,900 crore on 103 mines for excess production of iron ore.

“We have imposed penalty on major mining companies. So far 103 mines have been asked to pay fine totalling Rs 67,900 crore for indulging in excess production of ore,” Steel and Mines Minister R K Singh told reporters here.

While 61 mines had earlier been asked to pay Rs 47,805 crore as fine, Rs 20,095 crore penalty was imposed on 42 mines a couple days back for excess mining, he said.

Claiming that the state government was taking strong action against mining companies involved in irregularities, he said: “It was actually duty of the IBM to detect excess production by mining companies. Despite several suggestions, IBM did not to take action against the companies.”

“As IBM did not take action, the state government was forced to impose penalty. We are hopeful that the erring companies would pay the penalty in order to avoid further action against them,” Singh said rejecting the allegation that state government’s actions were delayed and intended to gain attention of Justice Shah Commission of Inquiry.

IBN Live made exactly that comment and dragged the Union ministry into the controversy too:

Many believe the Odisha government’s action is too little too late and the recovery of fines will not stand in court. CNN-IBN had exposed how the Union mines department amended rules just three days after the recovery notices were issued to miners by the state government observing that excess mining does not amount to illegal mining. Odisha Mines Minister RK Singh said, “It’s the duty of the IBM to point out these recovery and intimate us, which they did not do. Union mines department also told us that 20 per cent excess mining is ok. But still we went ahead and issued notices.”

A mining industry mouthpiece, SteelGuru, sought to justify illegalities by diverting attention:

As per the government’s latest move, mineral from the existing mines can only be used for captive consumption that to for 30 years. This has put a question mark on the fate of around 100 standalone mines that significantly contributed to the mining boom. Mineral based industries now stare at a bleak and uncertain future as they do not have alternative sources.

Experts said that moreover, the fate of more than 5 lakh families directly and indirectly engaged in these mines hangs in balance. The state itself would be deprived of huge revenue from the mining sector.

ET exonerates the industry more subtly by shifting the entire blame to the state government:

The plain fact is that the state government has habitually delayed renewal of mining leases, as the ongoing Shah commission of inquiry, appointed by the Centre to examine illegal mining in different parts of the country, has stated in its interim report (part I, section D).

It adds that it is “appropriate and desirable that the applications filed…are decided (sic) by the state of Odisha in a time-bound manner” (page 35).

The report notes that almost half the mining leases in the state have lapsed, several have actually not been renewed in over 10 years. And pending renewal, miners have simply operated under the ‘deemed extension’ clause in the Mines Act.

Deemed extension can only be temporary; lease renewals cannot be left pending for years, even decades. To cover up this indefensible act of prolonged omission would appear to be the motivation for the state government’s hurried move to levy penalty.

The Hindu reported that the Union government is using exactly the same argument:

Union Minister Srikant Jena demanded the resignation of Odisha Chief Minister Naveen Patnaik on Monday, alleging he was “directly” involved in the multi-crore mining scam in the mineral-rich State.

Mr. Jena, a senior Congress leader from Odisha and currently Union MoS (Independent Charge) Statistics and Programme Implementation, said the government led by the Biju Janata Dal (BJD) virtually admitted it was involved in the “mega loot of minerals” in the State when it recently imposed a fine of Rs. 58,000 crores on 27 operators for illegal mining.

“The Chief Minister is hand in glove with the mining operators on whom he has imposed a fine… The scam would not have happened had Mr. Panaik not been involved in the scam himself,” Mr. Jena told reporters at a press conference.

Present at the press conference were other senior leaders, including Kalahandi MP Bhaktacharan Das and former State Congress chief Jaydev Jena.

Mr. Jena, who had earlier written to Mr. Patnaik, demanding that the mining companies’ leases be cancelled, said the scam could be pegged at Rs. 4 lakh crore, outstripping the recent mining scams unearthed in Karnataka and Goa.

If the pattern of reportage seen in the other scams repeats, then we will see the state government emerge as the fall guy, leaving companies and the Union out of it altogether. But it seems unlikely that there are political parties which have not gained from this scam. Investigative stories by the media on who owns the mining units involved, and how they plug into the power structure would be very welcome, if they ever surface.


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