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Cover Story

Chaos in the iron age

4 Comments
May 31, 2013 | From the print edition

After iron ore plunder in Bellary and Goa comes a Supreme Court order that adds confusion to chaos

mining

Bellary district of Karnataka and Goa portray India’s very own gold rush. Today, they are the bywords for rampant violation of mining and environmental laws, unscientific depletion of resources and concentration of mining profits in the hands of a few. The plunder has also spread to other iron ore-rich states of the country.

It all started around 2003-04 with China going on a construction spree in the run up to the 2008 Olympics.

China is the principal importer of Indian iron ore and procures 91 per cent of what India exports, according to the Indian Bureau of Mines. (Interactive graphic: India's iron ore exports to various countries over the years)

Before 2003, it used to buy only high-grade iron ore, with at least 58 per cent iron content. But with the Olympics approaching, it started procuring even fines (ore in powder form) and ores with as low as 45 per cent of iron content. The Chinese developed technology that enabled them to mix this low-grade ore with very high-grade ore imported from Brazil and Australia. The Chinese demand also pushed up the international prices of iron ore.

This paved the way for chaos and scams that India’s iron ore-rich states witness today. Everyone hoped for a windfall from the sudden demand. Those who owned mines and those who did not mined without clearances, encroached upon forest and other’s lease areas; and excavated, transported and exported more than permitted. No one stuck to the approved mining plan. They even extracted minerals from waste dumps. It was a colossal plunder in connivance with the state governments, Union Ministry of Environment and Forests and IBM. The states lost revenue and the nation its rich resources. In the process of reckless mining, forests were cleared, hills were ravaged, farmlands were destroyed, streams and rivers were polluted, groundwater got contaminated, and the health of people and livestock was compromised.

Government-appointed committees entered the scene and unearthed shocking stories of illegalities and loot of iron ore. They also brought to the fore the intertwined interests of politicians and industry and the failure of the authorities to regulate mining.

Karnataka and Goa were the first ones to come under scanner. In Karnataka, the Lokayukta, the state’s ombudsman, estimated in its July 2011 report the total loss to the state exchequer at Rs 16,085 crore. The Supreme Court-appointed Central Empowered Committee’s (CEC) interim report on Bellary in April 2011 estimated that between 2003 and 2010, Rs 15,245 crore worth of iron ore was illegally exported from the region. It recommended a ban on mining in the region.

But in its February 2012 report, CEC backtracked and recommended resuming iron ore mining in Bellary and two other districts subject to conditions. It prescribed a model on the basis of which legality of mines can be categorised and they can be allowed to operate. It also suggested ways to restore the devastated ecology of the region (see ‘Bellary to bleed again’).

Mining companies in Goa are now going through the tests that Bellary was put through in the last two years. Surveys are under way, data is being compiled, accounts are being audited. Justice M B Shah Commission, constituted by the Centre in 2010 to probe illegal mining of iron and manganese ore in the country, has submitted its report, following which the Goan government has imposed a ban on mining of iron ore in the state. One of the key findings of the Shah Commission is that the state is incurring losses to the tune of Rs 35,000 crore due to illegal iron ore mining. The Supreme Court is also hearing the matter. As CEC is estimating losses from illegal mining in Goa, the mining industry in the state is under constant fear that CEC might recommend the Bellary model for Goa’s mines (see ‘Goa next’).

The next in line is Odisha. The 2010-11 report of IBM shows Odisha produces the maximum 37 per cent of iron ore in the country, followed by Karnataka and Goa (see graph). The Shah Commission has already heard mining companies and is preparing its report on the extent of illegalities in the state.

The Supreme Court’s Bellary judgement is the first of its kind in a mining case involving illegalities, irregularities, criminalities and corruption of unbelievable magnitude, and sets a precedent for all cases related to illegal mining, be it in Goa, Odisha, Chhattisgarh or Jharkhand.

M Suchitra from Bellary and Sugandh Juneja from Goa analyse whether it is possible to safeguard the environment while keeping the industry happy and if the Supreme Court order for Karnataka can be a one-size-fits-all policy.

AddThis

While I appreciate the rigour that has gone into documenting this report, it is not not nearly as hard-hitting as it ought to have been, given that we now have access to both The Shah Commission Reports and the CEC findings, and indeed Goa Foundation's petion before the court, or even better its counter-affidavit that severely demolishes the Parrikar government's somewhat spurious affidavit.

What is also disturbing is CSE's opaqueness on where it actually stands as far as mining of ore goes. I mean how much of proof and evidence do we need to know that mining can NEVER be 'sustainable'...

16 May 2013
Posted by
Hartman de Souza

Agreed; mining can never be sustainable, but then how do you get the metals to make all the things you need in the course of daily life? Right from the safety pins to the utensils you use... where does the metal come from?

18 May 2013
Posted by
Anonymous

In India lakhs of crores worth minerals are mined every year all over the country. Some part is meeting the local needs and other part is meeting legal & illegal export in terms of raw and finished products. If one wants to present the real picture without any bias, start from the area in different states, quality of ore, leased area plus illegal mining area, local use, export (legal & illegal), etc. Then tell to the people who are the real culprits. Instead of that targeting one or two like politicians may not be a good practice. The article goes in this direction only. Against Gali the case was filed by politicians to serve their political game. Iron ore mining was not considered an important issue when the price was low. In Andhra Pradesh the mining of iron ore started even before Gali was born.

Here the major issue is illegal export. Without the tacit support from port management it will not take place. Gali would have not exported illegally if any without the knowledge of Krishnapatnam port authorities. They are the main culprits. But, so much violation took place even Karnataka and Goa why Gali was put behind bars and others are freely moving? See the data presented in the article:

2005-10 -- Karnataka -- production 213.81 mt -- export -- 61.25 mt -- illegal export -- 23.18 mt

2005-10 -- Goa -- production 155.38 mt -- export 194.94 mt -- illegal export 39.56 mt

This clearly indicate our legal system, investigating system and environmental movement system are serving the vested interests with biased mind set.

You wrote Gali destroyed interstate boundary but at the same time you wrote Supreme Court asked survey to identify the boundary. This is not a good.

I wrote an article in Vaartha [12-8-2010] -- "Mineral industry: discussion". In 2006, globally iron ore mining data shows: global 1690 mt; China 520 mt, Australia 270 mt, Brazil 300 mt, India 150 mt. In 2003 around 105.5 mt produced of which 31 mt exported. In our country High grade iron ore is available 1280 mt; MP 630 mt, Orissa 320 mt, Karnataka 220 mt, Bihar 85; medium grade 4200 mt; Bihar 1790, Orissa 1300, MP 485, Karnataka 440, Goa 150 mt -- low to medium grade in AP, Kerala, Maharashtra, Rajasthan. This clearly shows it is not alone Karnataka and Goa there are other states where iron ore mining is carried out. While writing such articles bring out all the culprits.

Dr. S. Jeevananda Reddy

19 May 2013
Posted by
Dr. S. Jeevananda Reddy

How come Andhra is left out of the mining loot story ? It is good for the nation if we learn to keep environmental and political affiliations apart . Also everyone knows of the problems ....it would be great when environmental publications start focusing on the solutions as India has become a net importer of iron ore from a net exporter since mining was banned in some states and that has added to the rising current account deficit every month. In many parts of the world people are involved in sustainable mining. We in India need not re-invent the wheel but only follow those practices. Instead of that we are banning existing mining blocks which have already been devastated environmentally and planning to issue licenses in green field areas that will involve more cutting of forests.

The existing areas under mining are inefficiently mined, only from the surface to keep mining costs to the bare minimum. Why is that happening? Is anyone talking about it. Where are the regulatory norms and the regulators which can be easily put in place, considering the enormous revenue generated from the resources and the technology advances of satellite imagery. Every cubic feet of mining resource extracted can be today monitored at a very reasonable cost by using technology if there is a political will. It is the MOEF that has to educate itself adopting global best practices and then enforce the norms, without political bias that today permits Jindal but not Vedanta to put up bauxite mining projects in India.

21 May 2013
Posted by
Sandip (ecothrust@gmail.com)

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