BHUBANESHWAR | Aug 02, 2017: The fate of some of the country’s largest iron ore mines, and a Rs 60,000 crores claim the Odisha government is seeking from them, will be decided by the Supreme Court. Whichever way it goes, Wednesday's order will have far-reaching repercussion for India’s mining sector.
In April of 21, 2014 Prashant Bhushan on behalf of the NGO, Common Cause, filed a petition in the SC seeking action against leases indicted by the MB Shah Commission on illegal mining. He also wanted a CBI investigation into connivance of officials that had allowed, what the state unintentionally had acknowledged, was a Rs 60,000 crore scam.
Bhushan further argued that the Mines and Mineral Development and Regulation (MMDR) Act 1957 did not allow renewal of leases with violations. Leases across the country have been renewed since his petition, and particularly in the run up to the Narendra Modi government’s amendment that requires all fresh grants to be auctioned.
Wednesday’s order will set one thing straight -- whether a violation of environment and forest laws amounted to illegal mining. And whether such irregularities attract Section 21(5) of the MMDR Act under which the value of ore thus produced, and sold, can be recovered from the mine owner. Neither the court’s order on Karnataka or Goa’s iron ore mines covers this aspect.
The MB Shah Commission was of the view that it did. A committee appointed by the SC for an independent report, said it did not. The Central Empowered Committee though recommended that the court (using its extraordinary powers under the statute as it had in the case of Bellary) fine them. Its more realistic formula amounted to Rs 7000 crores against the original Rs 60,000 crore demand.
The cases of Sarda Mines (a supplier to Jindal steel and Power), Indrani Patnaik, Serajjudin, KJS Ahluwalia and RP Sao (all of who share a common contractor, Thriveni Earthmovers) accused of transferring control of their mines was also herd by the court. As was Essel Mining’s alleged forest violations at its Kasia and Jilling Langalota mines and Rungta Group’s mining rights to areas far exceeding the 10square km cap.
Between 2000- 2010, iron ore miners rushed to cash in on China’s seeming insatiable demand, exceeding permits and pre-empting clearances. Seeking to make belated amends Naveen Patnaik’s government slapped notices on all including Tata Steel, SAIL and one of the biggest violators state-owned Orissa Mining Corporation. It took a cue from the state Accountant General and asked miners to pay back the value of every tonne produced in excess of the IBM approved plan, the EC limit, or in the absence of an FC clearance.
But Section 21(5) under which recovery claims could be applied only to “land occupied without any lawful authority”, argued the industry. They had, almost all worked within their far larger lease areas. Their lawyers, including P Chidambaram, Abhishek Manu Sanghvi, and Gopal Subramaniam wanted the excesses judged under the provisions of the respective laws they violated - the Environment (Protection) Act 1986, the Forest (Conservation) Act 1980 or the MMDR and Mineral Concession Rules 1960. Subramaniam also spent days explaining that clarity on when an already operating mine required an environment clearance only came after the SC order of 18 March 2004 (MC Mehta vs Union of India) and the pursuant MOEF notification of 24 Oct 2004.
The Mines Ministry at the Centre, which had insisted Odisha’s claim was untenable under the law, in a curious affidavit to the SC did an about-turn. It pointed out, that Section 21(5) began with “whenever any person raises without lawful authority, any mineral from any land, the state government may recover from such a person mineral so raised or where such mineral is already disposed of , the price thereof …”. Ministry officials speaking on condition of anonymity explain this “overzealous” affidavit as a consequence of the SC’s landmark order on coal allocations.
(Source: http://economictimes.indiatimes.com/)