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Business News/ Politics / Policy/  Government, Odisha against CBI probe into illegal mining
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Government, Odisha against CBI probe into illegal mining

Supreme Court to hear legal AAP leader Prashant Bhushan's plea seeking a CBI enquiry into the matter on 3 March

The Odisha government denied the Shah panel’s report that nearly 80% of the mines operating in the state were illegal. Photo: BloombergPremium
The Odisha government denied the Shah panel’s report that nearly 80% of the mines operating in the state were illegal. Photo: Bloomberg

New Delhi: Neither the United Progressive Alliance (UPA) government at the Centre nor the state government of Odisha believes it is necessary for the rampant illegal mining of steel and manganese ore in the state to be investigated by the Central Bureau of Investigation (CBI).

That’s the message between the lines in the so-called action-taken report on the Shah Commission’s report; both were placed before Parliament on Monday.

On Monday, the Supreme Court said it would hear legal activist and Aam Aadmi Party (AAP) leader Prashant Bhushan’s plea seeking a CBI enquiry into the matter on 3 March.

In the action-taken report, the Union government sidestepped the issue of a probe by the federal investigation agency, while the Odisha state government said one wasn’t required because its own vigilance department had “taken prompt steps and conducted investigation effectively".

The state also denied the Shah Commission’s report that nearly 80% of the mines operating in Odisha were illegal. The commission said around 59,000 crore of ore had been illegally mined from the state between 2008 and 2011, and asked for a CBI enquiry.

The state government also denied the observation of the panel that there was a systematic failure in implementing the Mines and Minerals Development and Regulation (MMDR) Act.

M.B. Shah, a retired Supreme Court judge, was asked to study illegal mining in iron ore and manganese ore in November 2010 in the wake of reports that miners across India were over-mining and mining without necessary clearances, causing environmental degradation in the process.

Since then, the Shah Commission has submitted an interim report, a report on Goa, and the latest one on Odisha, which was submitted late last year.

The commission has put the value of unlawful extraction of iron ore and manganese ore at 59,203.33 crore.

In its observations, the commission has said the mining in around 1,388.66 hectares of land was illegal and without permission, and the illegal mining of such a large magnitude cannot be done without the connivance of officials of the district level and above from the mines, revenue and forest departments.

“There may be also some political shelter," the report said.

According to the action-taken report, the state government, which has initiated action against some officials, has also decided to put a provisional cap on production and dispatches in the Joda and Koira mining circles—where the illegal mining had taken place—at 44 million tonnes per annum (mtpa) and 13 mtpa, respectively, for the current year.

The state government added that it would initiate action against the accused “within the next month". It said that “no specific complaint against any political leaders was received and linkages established during investigation and, hence, cases have not been registered against them". The state also said it has sent 146 notices to companies named in the Shah Commission’s report.

The Union environment ministry added in the action-taken report that a study on the environmental impact of the mining, and maximum permissible annual extraction of ore will be carried out by an institute of repute.

Citing the report, news agency Press Trust of India said companies such as Tata Steel Ltd, Steel Authority of India Ltd, Jindal Steel and Power Ltd and the Aditya Birla Group were named by the commission. When contacted, the companies said they were yet to get access to the commission’s report.

An analyst said action arising from the commission’s findings could affect ore production in India. “As it is, many mines are closed on Odisha owing to the state government’s action in the last couple of years," said Arun Kejriwal, director of Mumbai-based research firm Kejriwal Research. “If there is any further reduction of iron ore production, iron ore prices could shoot up in the local market and steel imports could grow."

Mining in Karnataka was banned by the Supreme Court in 2011 before being allowed to resume in a regulated manner in mid-2013. But full-fledged production in the state is yet to resume, with many miners still waiting for the necessary clearances.

The apex court then stopped mining in Goa in 2012. The court is hearing a case on the issue. As a result of this legal intervention, iron ore production in India in 2012-13 fell to 143 million tonnes (mt) from 177 mt the previous year, and a peak of 226 mt in 2009-10, according to OreTeam, an iron ore and steel information portal.

Officials in Odisha have said that a majority of the iron ore and manganese mines in the state have been closed for running without necessary clearances and that the state government has not renewed the mining leases for a number of them, choosing to have them operate on deemed leases.

In 2012-13, Odisha accounted for nearly 45% of India’s total iron ore production, according to OreTeam. It produced 64.31 mt of iron ore, down nearly 5% from the previous year’s 67.41 mt, OreTeam said. Exports from the state stood at 4.34 mt in 2012-13, down 66% from the previous year’s 12.86 mt.

Given what has happened in Karnataka and Goa, “the Supreme Court may not demand a a total halt to iron ore production in Odisha", said Kejriwal.

Stock prices of the companies may react negatively and investors will be waiting to see if the matter snowballs, he said.

PTI contributed to this story.

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Published: 11 Feb 2014, 01:33 AM IST
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