Mining scams in India
Mining scam in India (colloquially Indian mining scam) is a series of widespread scams in various ore-rich states of India, and has generated controversy, which spans encroachment of forest areas, underpayment of government royalties, conflict with tribals regarding land-rights. The spill-over of the effects of legal mining into problems such as Naxalism and the distortion of Indian democracy by mixed political and mining interests, has gained international attention.
Latest scam that has come out is the Coal Mining Scam in which Government has had a presumable conservative loss Rs1.86 trillion (short scale), due to the delayed implementation of competitive bidding process for allotment of coal blocks, says the CAG.
- 1 Illegal iron ore mining in Karnataka
- 2 Investigation by Income Tax Department
- 2.1 Interim Lokayukta report of December 2008
- 2.2 Collusion of officials and politicians in permitting illegal mining
- 2.3 Underpayment of royalties to state
- 2.4 Environmental damage
- 2.5 Belekeri port scandal
- 2.6 Related road damage, accidents and loss of lives
- 2.7 Recommendation to ban iron-ore exports
- 2.8 Lokayukta Report of July 2011
- 3 Illegal mining in the Aravali Range
- 4 Bauxite, Iron Ore, Chromite and coal mining in Orissa
- 5 Iron ore mining in Madhya Pradesh
- 6 Illegal mining in Goa
- 7 Illegal mining and stone crushing in the Ganges river bed
- 8 Union government commission to probe illegal mining
- 9 See also
- 10 References
- 11 External links
Illegal iron ore mining in Karnataka
Rising global iron-ore prices driven by Chinese demand brought focus to the iron ore rich Bellary region of Karnataka. This iron ore is alleged to have been illegally mined after paying a minuscule royalty to the government. The major regularities involve mines in Bellary, including those of Obulapuram Mining Company owned by G. Karunakara Reddy and G. Janardhana Reddy who were ministers in the Government of Karnataka at the time.
Investigation by Income Tax Department
Income tax sleuths unearthed under-invoicing and tax evasion of around Rs 86 crore by the Obulapuram Mining Company (OMC), run by Karnataka's Reddy brothers and also their trusted confidante and state health minister B Sriramulu. The team of officers under the Directorate General of Income Tax Investigation after getting clues to tax evasion by OMC B N Mohan(Deputy Commissioner), Sibichen K Mathew(Additional Commissioner) and G M Belagali(Commissioner) of Bangalore (Commissionerate) Central circle were assigned to work on the case.They found that the OMC had entered into a MoU with a one-dollar company of Singapore to camouflage the company's income suppression.This report was recorded in the book Let us Share by the Finance Ministry.
Interim Lokayukta report of December 2008
A report published by the LokAyukta uncovered major violations and systemic corruption in mining in Bellary, including in the allowed geography, encroachment of forest land, massive underpayment of state mining royalties relative to the market price of iron ore and systematic starvation of government mining entities. Justice N. Santosh Hegde resigned from the Lokayukta position on 23 June 2010 citing inability to be effective in his anti-corruption mandate owing to a non-cooperative Government of Karnataka In January 2010 Mr Kharge questioned the governoment about transfer of Dileepkumar PCCF who refused to sign the report but Government brought S Nagaraja as PCCF who signed the report.
Collusion of officials and politicians in permitting illegal mining
According to the Indian Bureau of Mines Year Book for 2011, the states reported 49.97 lakh tonnes of sand mining which according to officials are gross under estimates. The guidelines under the Central and the state enactments, call for a sketch of the mining area when a mining lease is applied for. It was found by the Lokayukta that sometimes the actual mining areas are not related to the sketch given with the applications without officials crosschecking them. Further mining applicants falsely claim a prohibited forest area as a revenue area. Finally the actual area of the mine is much bigger than the claimed area. The Indian Bureau of Mines rules which control the type of mining, allow a maximum mining depth six metres to prevent environmental degradation. But miners have flouted this rule to over-extract iron-ore. For example, if they are allowed to take 100 metric tones, mines take 1,000 metric tonnes. Officials at road check posts reportedly collude in a massive under-counting of lorries and trucks transporting the iron-ore from the Bellary mines to the ports. News reports suggest that only 200 trucks are reported as against 4000 plying everyday.
Underpayment of royalties to state
There is a huge difference in the market price of the ore and the royalty specified by the government as well as faulty measurement mechanisms of amount of ore extracted. It was found that 3.5 million tonnes of ore were illegally exported without paying a rupee of royalty to the exchequer, resulting in a loss of about Rs160.85 billion. With ore prices of USD 100–120 per ton, 3.5 Million tonnes adds up to about 350–4000 Million USD. There are proposals to link the royalties to the market price of iron-ore. There is also a proposal by the ministry of Environment and Forests to levy a tax.
According to the Lok Ayukta Report, there have been severe ecological changes due to illegal mining. Certain species of animals, like the sloth bear, that in the Bellary region have disappeared. Medicinal plants from the area do not grow any more. The entire system of rain has changed in the district of Bellary. It is reported that the entire area surrounding the mining area is denuded of greenery and has no agricultural activity.
Belekeri port scandal
Related is the Belekeri port scam where illegally mined ore which had been seized was surreptitiously exported from the port. Karnataka Chief Minister Yeddyurappa admitted to an illegal iron-ore export racket at Belekeri Port involving 3,500,000 tonnes of iron ore.
Related road damage, accidents and loss of lives
The lack of effective regulation in the mining and transport of iron ore has adversely impacted road safety. Overloaded Trucks carrying ore have caused hundreds of fatal accidents on the roadways leading to ports such as Belekeri and damaged national highways in the region.
Recommendation to ban iron-ore exports
The Indian government (steel ministry and law ministry) is considering a ban on exports of iron ore and limit mining only to captive iron and steel production units. This has been opposed by the mining ministry citing massive loss of employment.
Lokayukta Report of July 2011
The Lokayukta Report on illegal mining in Karnataka details the methods in which miners, government officials and ministers colluded to defraud the government of mining revenues. The report details the complete breakdown of democratic governance in the bellary area and uncovers the "zero risk system", a protection and extortion racket, masterminded by G. Janardhana Reddy. The report describes the illegal money transfers to foreign companies and tax shelters by mining entities such as Obulapuram Mining Company, Associated Mining Company, GLA Trading and GJR Holdings owned by the Reddy Brothers. The report tells about illegal mining, bureaucrats-politicians-businessman nexus. Even banks and public sector companies also participated in the loot. There are more than 100 names involved in illegal operation. NDMC and JSW Steel are some major name in fraud list. Charges against these companies are illegal movement of iron ore from mining yard without permits and without paying royalties, forest encroachment, mining lease violations, overloading of trucks and sandry violation etc. The iron ore was illegally exported to china through ports of southern India and payment is made through more than 4000 banks account. Damage to environment can not be calculated. This report was prepared mainly from the Income Tax Commissionerate of Central Circle prepared by Additional Commissioner of Income Tax Sibichen K Mathew IRS .
Illegal mining in the Aravali Range
Bauxite, Iron Ore, Chromite and coal mining in Orissa
Bauxite mining by Vedanta Resources in tribal areas of Orissa have led to conflicts in land rights. The Supreme Court on 18.04.2013 ruled that the Vedanta Group's bauxite mining project in the Niyamgiri Hills of Orissa will have to get the gram sabha's clearance on whether it affects the cultural and religious rights of the tribals and forest dwellers living in Rayagada and Kalahandi districts. While the gram sabha's nod is compulsory under the Forest Rights Act, the court made it clear that the Act confers powers on the gram sabha to "protect the community resources, individual rights, cultural and religious rights". "Gram sabha can also examine whether the proposed mining area, Niyama Dangar, 10 km from the peak, would in any way affect the abode of (deity) Niyam Raja. Needless to say, if the bauxite mining project, in any way, affects their religious rights, especially their right to worship their deity, that right has to be preserved and protected," said the bench comprising Justices Aftab Alam, K S Radhakrishnan and Ranjan Gogoi. Illegal excess iron ore and chromite mining amounting to Rs679 billion have been investigated by vigilance and Saha commission(joda, Badabil in keonjhar district and Kalipani Sukinda of Jajpur) violating total rule of law. The nexus between private firms like (RBT, TATA, Birala, essel, Runguta, Jindal, IMFA, OMC, SARADA group, etc.) and corrupt bureaucrats, political leaders looted Orissa. It is no secret, due to lack of supervision of officials of the pollution control Board, Indin bureau of Mines, state mines department, district collectors and ministry of environment and forest. When environment clearance is granted to any mine, the maximum amount of ore which can be mined per year is specified. 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.There have been four PILs in the Orissa HC demanding a CBI probe into the scam. Though the Union Mines Ministry has expressed its readiness for a CBI probe into the matter citing the report of Indian Bureau of Mines, the state government is vehemently opposing it. The Bureau had found considerable illegal mining of manganese and iron ore in Keonjhar district. The state government, which has appointed senior Supreme Court advocate Mukul Rohtagi to plead for it in the High Court, has been opposing the pleas made by several petitioners for CBI probe into the mining scam.The state government has suspended 128 mining leases for various minerals, including iron ore, manganese, chromites, limestone, while 482 licenses granted for trading and storage of minerals have been cancelled to stop illegal mining.The Justice M B Shah Commission probing the state's mining scam will need to unearth more before it can bring out a report. Though it had been expected to submit its report by the end of December, complaints from miners over allegedly misleading evidence given by the state government have now delayed that. During a recent meeting with commission members, the miners alleged that steel and mines department officials had superimposed Google maps on the revenue map to determine lease area encroachment. Also, they said, differential global positioning system (DGPS) maps given by the Orissa Space Application Centre were erroneous. The commission has directed the state to form a committee for physical survey and lease area demarcation of mines. With so much to do, even Justice Shah has expressed doubt if the commission can meet its July deadline Coal mining has run into trouble as well in Angul district over land issues.
Iron ore mining in Madhya Pradesh
On 14 November 2011 person known as Rajendra Dixit registered a complaint at Madhya Pradesh Lokayukta Office against Indian National Congress MLA Sanjay Pathak's mining firms, demanding a Lokayukta probe against an alleged iron ore mining scam worth Rs50 billion allegedly committed at Sihora, Jabalpur. He also presented on record copy of the note-sheet which was said to be prepared at the orders of then CM Digvijay Singh on 24 June 2002 in which he allegedly ordered the upper secretary, Department of Forest to declare the forest land as revenue land to allow Pathak's mining firms perform iron ore Mining at the site.
Illegal mining in Goa
The Shah Commission report on mining in Goa has accused both the state and the Union Ministry of Environment and Forests (MoEF) of allowing illegal mining in the state, putting the region's environment and ecology at risk. The commission, headed by Justice M B Shah, was set up by the Centre in 2010 to probe into the illegal mining across the country. About 55 per cent of the iron ore exported from India comes from Goa. The common illegalities the report points to are mining without licence, mining outside lease area and transporting minerals illegally.The Bombay High Court bench in Panaji 26.03.2013 directed the Goa government to file an FIR against over 150 people - including politicians, mine owners and bureaucrats - who have been indicted in the Justice M.B. Shah Commission report.The order was issued by Bombay High Court Chief Justice Mohit Shah following a petition by an electricity department employee, Kashinath Shetye, who said that the Rs.35,000 crore scam exposed by the judicial commission should be probed by police.Justice Shah directed the state government to "file an FIR (First Information eport) in respect of offences alleged to have been committed by persons responsible for illegal mining in the state of Goa, including the lessees of the mines and all those who permitted such illegal mining of iron ore and manganese ore, in contravention of the relevant statutory provisions".The chief justice said that the FIR had to be filed "within a period of six weeks".Shetye had first filed a complaint with the Crime Branch, which had not filed an FIR, forcing the petitioner to complain before the high court.The M.B. Shah Commission report had exposed a Rs.35,000 crore illegal mining scam, in which politicians, bureaucrats and mining companies were indicted.Mining in Goa has been banned for over five months now by the Supreme Court, which is hearing a petition filed by lawyer Prashant Bhushan and local environmental NGOs.The Union Ministry of Environment and Forests (MoEF) has decided to ban mining within at least one kilometre of the boundary of national parks and wildlife sanctuaries in Goa.
Illegal mining and stone crushing in the Ganges river bed
Illegal mining in the Ganges river bed for stones and sand for construction work has been a long problem in Haridwar district, Uttarakhand, where it touches the plains for the first time. This is despite the fact that quarrying has been banned in Kumbh Mela area zone covering 140 km2 area in Haridwar. On 14 June, Swami Nigamanada, a 34-year old monk who was fasting since 19 February 2011 against illegal mining and stone crushing along the Ganges near Haridwar, died at the Himalayan Hospital in Jollygrant in Dehradun, after alleged poisoning by stone-crushing mafia. His death put spotlight on the activity including intervention by Union Environment minister.
Union government commission to probe illegal mining
The mining ministry of the union government has announced a special commission to investigate the various cases of illegal mining in India. The union mining minister, B.K. Handique, announced that the investigation spanning Karnataka, Orissa and Jharkhand, will submit a report in 6 months.Almost two years after its ban, the Supreme Court on dt18.04.2013 allowed resumption of mining activities in 90 mines in Bellary, Tumkur and Chitradurga districts of Karnataka. A forest bench of Justices Aftab Alam, K S Radhakrishnan and Ranjan Gogoi allowed reopening of 27 category 'A' and 63 category 'B' mines, subject to conditions, including adherence of the reclamation and rehabilitation plans. However, the bench cancelled 49 leases of category 'C' mines, where maximum illegalities were reported, for "playing havoc with the national economy" and casting an "ominous cloud on the credibility of the system of governance by laws in force". Stating that the satellite images with respect to environmental damage and destruction by illegal mining had "shocked judicial conscience", the court said public interest would precede individual interest of these 49 category 'C' leaseholders and hence "complete closure" of these mines was warranted. The leases for iron ore mining had been categorised by the court-appointed central empowered committee as 'A', 'B' and 'C', based on the level of alleged illegalities. Of the 166 mining leases where operations were banned in 2011, the court suspended the leases for seven category 'B' mines on the Andhra Pradesh-Karnataka border.
- List of scandals in India
- Corruption in India
- 2011 Indian anti-corruption movement
- Jan Lokpal Bill
- Rent seeking
- 2G spectrum scam
- Uttar Pradesh NRHM scam
- Justice AK Ganguly
- Right to Public Services legislation
- Corruption Perceptions Index
- Licence Raj
- Mafia Raj
- Concerns and controversies over the 2010 Commonwealth Games
- Lok Ayukta
- Socio-economic issues in India
- United Nations Convention against Corruption
- Durga Shakti Nagpal
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