JAL KHAMBATTA
jal@herald-goa.com
NEW DELHI: The Justice M B Shah Commission that probed into the iron ore and manganese trade in various states including Goa has opened a fresh pandora’s box with the tabling of its comprehensive report on the illegal mining in Goa, Odisha and Jharkhand, in the Lok Sabha. Mines Minister Narendra Singh Tomar tabled the “Third Report of the Justice M B Shah Commission of Inquiry on illegal mining of iron and manganese ores (one volume) in the State of Goa – October, 2013”, along with Memorandum of Action taken thereto in the Lok Sabha.
In its report tabled in Parliament on Monday, it found illegal exports of ore during 2000-2010 worth Rs 2,747 crore from Goa and recommended not only recovery of this amount but with interest from firms and penal action.
It noted that the situation was much worse in Jharkhand and Orissa. In Jharkhand, even the public sector SAIL and reputed companies like Tata Steel “illegally” extracted iron and manganese ore worth Rs 14,541 crore. In case of Odisha, the culprit firms which encroached upon area around their leased land included Tata Steel and Aditya Birla Group’s Essel Mining.
Considering an average price of US $40 per tonne, the value of illegal exports from Goa that has been resorted without paying royalty during the period was worked out to be Rs 2,747 crore, pegged at the exchange rate of Rs 43 per dollar, the report said.
“Hence, the amount is required to be recovered in addition to penal actions arising out of as theft of iron ore outside the country and other actions,” it said, pointing out the large mismatch in the production and export data provided by the Customs and the Mineral Ore Exporters Association.
Noting that there is a large difference between the total quantity of ore produced and exported, the report said the higher quantity of export is taken as illegal export and corresponding loss to the exchequer. The major exporters from Goa during the period includes Sesa Goa Limited and Sesa Resources Limited.
The Commission has suggested that mining leases be cancelled in cases where the encroachment is more than 15 per cent of the leased area. In case of Orissa, it suggested a fine of Rs 2 crore on each hectare of encroachment.
While the Supreme Court had directed the Karnataka Government in 2013 to recover the cost of damages due to encroachment outside the leased area at the rate of Re 1, the Commission wanted the fine of Rs 2 crore per hectare in Orissa because its ecosystem is very sensitive in view of high forests, best elephant habitat and corridor.
Also citing the Supreme Court order to cancel leases which encroached more than 15 per cent beyond the lease area in Karnataka, the Commission said: “Similar action should be taken in the case of Orissa state also.”
Quoting the survey carried out by the state government, the Commission noted that Tata Steel had encroached 13.25 hectares amounting to 1.98 per cent of total leased area in its Joda-East iron ore and Manmora manganese mines while Essel Mining and Industries encroached in two cases, one being more than 10 per cent.
Three mining companies, two deals and one union minister
(Disclaimer: The Herald has not physically procured a hard copy of the third report for Goa, but has had very reliable access to some of its contents. The specific names of the firms and the nature of the Commissions indictment have been held back till the report is procured)
Among scores of many violations listed in this report there are three firms and one major deal that changed the mining power equation which have been specifically mentioned and indicted for various acts. Importantly, a former Union Minister closely associated with one of the companies involved in the mega deal
a) “Illegal” mega Rs 1,800 crore buy-out deal?
In 2009, an international mining conglomerate signed a definitive share purchase agreement under it acquired all the outstanding common shares of a major Goan mining firm. The deal was signed for a total consideration of Rs 1,800 crore (equivalent to US$368 million), on a debt-free and cash-free basis
Justice Shah had asked if the leases operated by the former company had been transferred to the new company under Rule 37 of the Mineral Concession Rules 1960, after necessary permissions from the State government and the Central government and concluded that the Goa government allowed mining on these leases without any permission from the Centre
b) The report mentions one former high profile Union minister who was associated with one of the two consortiums involved in the deal and pulled out of the association soon after
c) One company with mining interests in Goa, Karnataka and Africa has defaulted on royalty payments as well as illegally exported ore. The loss on account of this company alone is about Rs 1,800 crore
