Clean Chit to Sarda Mines exposes Unholy Nexuses in Odisha’s Mining Zone

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By Our Business Bureau

JODA/BARBIL/BHUBANESWAR/KOLKATA: Arjun Saraswat , the Director Cum Nominated Owner, SL&ML Sarda Mines Pvt Ltd, has the last laugh. The Kolkata headquarters and lease holder of Thakurani Iron Block-B under the Joda Mining circle of Odisha’s mineral rich Keonjhar district, Sarda Mines , which is facing a fine amount of Rs 1,983.86 crore for illegal mining, violation Rule 37 of the Mineral Concession Rules, 1960 (now amended) seems looking to escape unhurt after the Supreme Court appointed panel gave clean chit to it. Jindal Steel and Power (JSPL) was a major beneficiary of the mine.

The committee, which comprised of former Supreme Court judges Justice Anil R Dave and Justice G S Singhvi, was asked to investigate ‘de nouveau’ about fifteen lessees, accused of either having transferred control or holding mining rights in excess of permissible limits, by the apex court in the mining case (Common Cause v. Union of India and others) through an order dated November 22, 2017. The panel surprisingly gave clean chit to Sarda Mines raising many eyebrows. Are Justice Dave and Justice Singhvi true? Or Is Justice MB Shah Commission true? Is Justice MB Lokur true? Or CEC true or is Supreme Court? And last Odisha Government’s claim also died down. This was a billion dollar questions now.

Sarda Mines was accused of violating Rule 37 of the Mineral Concession Rules, 1960 (now amended) which bars the transfer of control of a lease without prior government approval. Sarda Mines, accused by the Naveen Patnaik led BJD Government in Odisha of supplying subsidised ore to Jindal Steel and PowerNSE 0.94 %, has also been found not violating mining rule.

The central empowered committee CEC, an apex court-appointed panel to probe illegal mining in Odisha, had calculated the figure for excess mining beyond the limits approved under EC), at Rs 17,576.17 crore. Its report says miners illegally extracted 215.5 million tonnes of iron and manganese ore between 2000-01 and 2010-11.

The Supreme Court in a judgment dated August 2 this year, had directed the Odisha government to extract the cost of excess production from the defaulting miners. The apex court called for the recovery of 100 per cent compensation compared to 30 per cent recommended by the central empowered committee (CEC), a panel appointed by the court to probe into allegations of large-scale illegal mining in the state. The court was adjudicating in a case relating to rampant illegal mining in Odisha filed by the NGO Common Cause.

Many panels right from State Vigilance, Justice MB Shah Commission, CEC , all held that  Sarda Mines (SMPL) guilty of illegal mining in Odisha, the Supreme Court said that an environmental clearance granted to it cannot be applied retrospectively and any mining done prior to obtaining the environmental clearance shall attract penalty. Sarda Mines had acquired a mining lease for over 947.046 hectare for 20 years from 2001 to 2021 for Thakurani iron ore mine in Keonjhar in Odisha, but the environment clearance was granted only in 2004. Holding Sarda Mines (SMPL) guilty of illegal mining in Odisha, the Supreme Court had said that an environmental clearance granted to it cannot be applied retrospectively and any mining done prior to obtaining the environmental clearance shall attract penalty.

It was decided that SMPL had to pay around Rs 1,938 crore as penalty for illegal mining till now. Sarda Mines had acquired a mining lease for over 947.046 hectare for 20 years from 2001 to 2021 for Thakurani iron ore mine in Keonjhar in Odisha, but the environment clearance was granted only in 2004.

The bench led by Justice Madan B Lokur had also rejected the mining company’s argument that there were no illegalities involved and asked its own Centrally Empowered Committee (CEC) to recalculate how much iron ore was mined illegally by the company and what penalty should be imposed on it. The court also said that Sarda Mines was granted permission to only extract mineral iron ore and not iron ore lump, which is a by-product of iron ore mining.

The apex court asked the CEC to quantify the penalty to be imposed on SMPL from September 22, 2004 within six weeks. “The calculation should also take into consideration our conclusion that the environmental is not retrospective and the first year of production, in view of the environmental clearance granted to SMPL would be 2004-2005. Any mining in excess of the environmental clearance by SMPL would be and is illegal,” it had said, while also rejecting the firms’ argument that the permission to mine mineral iron ore does not include permission to mine lump.

The tainted Mining firm, began its journey in the year 2001 when on 14th August 2001, Mining Lease of Thakurani Iron Ore Mines Block-B over an area of 2590.40 Acre or 947.046 Ha. in village Soyabali of Barbil tehsil, Dist Keonjhar was executed in favour of Sundar Lal Sarda and  Mohan Lal Sarda. In the year 2006, the lease was transferred in favor of Sarda Mines Pvt. Ltd. on 22nd June 2006 with an objective of scientific mining on an economic scale of operation.

“Due to deforestation in various hills, 80 per cent of streams have gone dry. The water flow in Deogarha’s Padhanpata, Sundargarh’s Khandadhar and Keonjhar’s Sanaghagara and Badaghagara waterfalls has decreased by 50 per cent in last 10 years,” said an activists in Joda-Barbil in Keonjhar.

“ The Government had earlier admitted that the water-flow in the Padhanpata waterfall at Deogarh had decreased drastically due to destruction of forests. But on the contrary, it showing favour to Sarda mines,” a local activist in Joda said.

Locals in Joda, Barbil areas however expressed concerns over the dwindling of the wild animals and the increasing man-animal conflict in human habitations due to water and fodder scarcity in jungles and hills. “The residents of Joda will suffer acute water scarcity in near future due to illegal mining work of Sarda Mines,”

Meanwhile, several wildlife and social activists have sought a court-monitored probe into the extension of lease and allotment of the mineral mines for free of cost alleging that it had caused huge financial loss to the public via a concocted conspiracy.

“Within the principle upheld by the Supreme Court in its previous judgement, no natural assets can be allotted/extended free of cost. Impugned extension is contra to the law of the country. No where in the Act, it says to extend the lease free of cost. At least value of extension must be decided as per the maximum rate of auction value by the state or by another state government during these period,” they said.

They argued said that loss caused to the exchequer is liable to be recovered from the mining firms and their leases are liable to be quashed and the mines be put to fresh auction.They also demand quashing of section 8A of the MMDR (Mines and Minerals (Development and Regulation) Act.Section 8-A of the Act provides that all mining lease should be granted for a period of fifty years and on expiry of lease period, it should be put up for auction as per the procedure specified in the Act.

“We suspect that a large amount of political donation has been given by the corporate miner for the impugned provisions (of MMDR Act) for extension of the mining lease as free of cost from escaping auction process which is also a subject matter for CBI investigation and calling list of mines from all states for further action,” they said.

According to official sources , all old lease of the minerals mining, except coal block, has been extended for further 5 to 20 years under the garb of the amendment of 2015 without charging any cost/ premium and fresh value to pay for mining while new mines has been put up for auction which were auctioned for 80 per cent to 110 per cent premium other then royalty .

The quantity of ore that is to be extracted every year specified in the mining plan which is approved by IBM. Forest and environment laws have been violated installing screening plants without statutory clearance. No action has been taken by any of department state and center excess mining of the specified limit violating operating conditions, assessing impact on the local environment, grabbing unauthorised forest land.

 94 of the 192 iron ore mining leases in Odisha do not have the mandatory environmental clearances. And of the 96 that have them, 75 have mined far beyond their permitted levels over the past several years, says the Justice M.B. Shah Commission report.

The exhaustive five-volume report lays bare how the mines have continued to use a loophole in the law for years and flagrantly violate environmental and other norms to pump out iron at a time when international prices of the metal are booming.

The report says 56 mining leases operated close to identified wildlife areas without adequate protection to the animals. The mandatory forest clearances had not been obtained in several cases. Waterbodies in and around 55 mines have been polluted. Water has depleted in natural streams in some cases and forestland impacted adversely in several others. A mining-project within a 10-kilometre vicinity of a protected wildlife area requires mandatory clearance from the National Board of Wildlife, which too was not obtained in several cases.

It has recommended that the entire extraction in all cases, where leases are operated without mandatory environmental clearances, be treated as illegal and the market value — domestic or export — recovered from the defaulting miners.

With no political parties raising the issue of corruption and irregularities in Odisha during the campaigning for the last Lok Sabha polls and Assembly, apprehensions are being raised if culprits will ever be brought to book.Probes into Rs 3 lakh crore mining scam have slowed down in the last couple years, raising doubts about a tacit understanding among the leaders.

The CEC, in its interim report, had revealed that a large number of mines operated in Odisha after the expiry of mining lease period on the provision of deemed extension of mining lease as no decision was taken on application filed by the lease-holders for renewal of the leases.It found that at least 163 mining leases operated without the requisite approvals under the Forest Conservation Act, 1980; environmental clearances, Air and Water Act or approved mining plans.The CEC also found that out of the 596 mines, as many as 307 mines consisted of either wholly or partly forest areas.

The Odisha government, in its reply furnished to National Mines Tribunal (NMT) in 2013 had admitted the illegalities committing in mining activities and stated that it had slapped Rs 65,000 crore penalty on 196 mine owners who allegedly indulged in illegal and over-extraction of minerals, mainly iron ore. Challenging the state government’s decision to impose penalty, many mines owners have gone to the court.However, the state government’s lack of seriousness to pursue the case has resulted in a paltry recovery of the penalty.

This apart, company played a key role in Odisha mining scam and violated Mines and Minerals Act, Mines and Minerals Regulation Act of 1957’s section 21. The company involved in illegal mining, theft and transportation. The company has violated pollution control act of 1986, air pollution control act of 1981, water pollution control act of 1974 and forest rights act of 1980.

Companies were supposed to extract mining with clearance of air and water pollution control under various acts like Environment (Protection) Act, 1986 and consent to operate under the Water (PCP) Act, 1974 and Air (PCP) Act, 1981.

The firm has been violating forest and wildlife laws .The Company, which is also creating air and water pollution while defying orders of Odisha State Pollution Control Board and Union Forest and Environment Ministry. Action should have taken against the company under Forest Conservation Act, 1980 and Odisha Forest Act-1972 and Mines and Minerals Act. But instead , the company got extension to run its closed mines.

Company which operating without valid consent to operate should have been issued closure directions or will be prosecuted as per the provisions in Water (PCP) Act, 1974 and Air(PCP) Act, 1981.While granting “consent to operate”, it will be ensured that the proponent has obtained all other statutory clearances under Forest (Conservation) Act, 1980 and Environment (Protection) Act, 1986.The Company has no respect to labour laws, they said.

The Group is member of Quality Circle Forum of India, Federation of Indian Mineral Industries (FIMI), Institute of Advance Technology & Environmental Studies (IATES), Eastern Zone Mining Association (EZMA), Society of Geoscientist and Allied Technologists (SGAT), Mining Engineer’s Association of India (MEAI), CII-TPM Club of India.

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