SC panel rejects TN-Jindal mining project

Land trouble: JSW Steel vice-chairman and MD Sajjan Jindal. Ramesh Pathania / Mint

Jindal Vijayanagar Steel Ltd, or JVSL, had formed a joint venture with state government-owned Tamil Nadu Industrial Development Corp. Ltd, or Tidco, for mining iron ore from the Kanjamalai and Kavuthimalai reserved forests.

Reserved forests, classified a rung below wildlife sanctuaries, enjoy a certain degree of protection from use or exploitation and projects in these areas require clearances from a central authority.

The Central Empowered Committee (CEC), constituted by the Supreme Court for reviewing environment and forest-related issues, said in its 29 June order that Tamil Nadu Iron Ore Mining Corp. Ltd, or Timco, the joint venture, should not go ahead with the implementation of its iron ore, beneficiation and pelletization project.

“…the permission sought for the felling of 2,22,397 trees of spontaneous growth in 325 hectares (ha) of reserved forest in district Thiruvannamalai for the implementation of the iron ore mining and pelletization project by Tamil Nadu Iron Ore Mining Corp. Ltd or Timco may not be granted," CEC said in its report.

Mint has reviewed a copy of the order.

An email sent last week to Jindal group’s manager, corporate communications, Probir Pramanik, remained unanswered, as was a fax sent to the office of Tidco chairman and managing director, Anita Praveen.

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The Jindal-Tidco project was to mine, concentrate and pelletize 1 million tonnes (mt) of iron ore a year.

The joint venture was to sell the iron ore produced at the Kanjamalai and Kavuthimalai reserved forests in Tamil Nadu’s Salem and Thiruvannamalai districts, respectively, to Southern Iron and Steel Co. Ltd, or Siscol, to manufacture pig iron and coke.

In 2008, Siscol was merged with JSW Steel Ltd, India’s second largest steel producer by domestic manufacturing capacity and part of the Sajjan Jindal group.

With respect to the forest project in Salem district of Tamil Nadu, CEC said, “…it would not be in public interest to grant the approval under the FC (Forest Conservation) Act for the non-forest use of 638ha of reserved forest areas for the project or to grant permission for the felling of trees for the implementation of the project."

“The only option is that they (the joint venture) will have to file an appeal with the Supreme Court against CEC’s recommendations," said a Union government official familiar with the development. “The ministry of environment and forests cannot give any clearances (in relation to this project) unless approved by the Supreme Court."

Another observation by CEC is with respect to Tamil Nadu Iron Ore Mining Corp.’s shareholding pattern.

The estimated equity capital of the mining firm is Rs135 crore, of which Rs1.35 crore, or 1%, would be invested by Tidco. This minority stake would be disinvested after three years, after which the ownership would be with Timco “without any stake or benefit to either Tidco or to the state government, though all permissions and approvals are being sought/obtained by stating that it is a joint venture project of the state", the committee said in its report.

The Supreme Court panel also pointed out that the regional office of the ministry of environment and forests too had recommended that the project not be cleared.

In terms of environmental impact, CEC said implementation of the project could affect water and air quality in Salem. And in Thiruvannamalai, it noted that the forest area has “several species of endangered flora and fauna" and “the use of 325ha of undisturbed reserved forest for iron ore mining and pelletization project far outweighs the financial benefits that may accrue by way of reduced cost of raw material for Tamil Nadu..."