SC halts work in 26 mines operating illegally in Odisha

Asks state to consider all mine renewal applications at the earliest and dispose them of within six months

By Srestha Banerjee
Published: Sunday 18 May 2014


The Supreme Court has cracked down on illegal mining operations in Odisha. In an interim order on Friday, Justice A K Patnaik suspended mining activities in 26 iron ore mine lease areas, saying these were operating without legal permits. The mines in question were found to be operating on the pretext of having obtained “second and subsequent renewals” without any such order being passed by the state government.

The court said these leases will not be allowed to operate until express orders are passed by the Odisha government under provisions of the Mines and Minerals (Development and Regulation) Act, 1957. The court has also asked the state government to consider all renewal applications at the earliest and dispose them of within six months.

The state has been further directed to first consider the renewal applications that involve leases which were granted for captive mining of iron or manganese ore as raw material for industries, and thereafter consider the renewal applications in respect of the other leases. This followed a plea of the Union Ministry of Steel, which made a submission saying more than 50 per cent of the requirement of iron ore of the country is met from Odisha and that a large number of iron ore leases in the state are granted for captive mining and the ore from the mines is being utilised for manufacturing of the steel in the plants of the lease holders. Further, commercial miners are also providing raw material to iron and steel industries not only in the state but also in the whole country, the ministry said.

The order came in the wake of a petition, filed by non-profit Common Cause in February this year, which sought immediate judicial intervention to terminate all mining leases that are involved in illegal mining activities in Odisha. The petitioner highlighted the observations of the report of the Justice M B Shah commission that had pointed to large-scale illegal mining in the state in its report submitted to the Centre in October last year. The commission was set up by the central government in November, 2010, to look into illegal mining of iron ore and manganese in the country.

On April 21, the court had asked its Central Empowered Committee (CEC) to investigate the matter and identify the lessees who are operating the leases in violation of the law. The Odisha government and the union Ministry of Environment and Forests (MoEF) were asked to cooperate with the investigation. CEC submitted its report on April 25.

Legal status of mines

The bench noted that a total of 56 iron ore/manganese mining leases are presently operating in Odisha legally, among which 40 mining leases are operating under the deemed renewal provision in Rule 24A of the Mineral Concession Rules, 1960. Out of these 40 mining leases, 14 are operating as first renewal and 26 leases are operating as second and subsequent renewals and the renewal applications are at various stages of examination by the state authorities.

The court specifically noted that the 26 leases, that are being operated as second and subsequent deemed renewals under Rule 24A(6) of the Mineral Concession Rules, 1960 without any order passed by the state government are not permitted to do so. The bench clarified that the deemed extension clause in Rule 24A(6) of the Mineral Concession (MC) Rule, 1960 is not available for the second and subsequent renewals of a mining lease. Provisions for such renewals should be read along with the provisions of Section 8 (3) of the Mining and Minerals (Development and Regulation) Act, 1957, which says that the approval for second or subsequent renewal of a mining lease will be given by the state government only if it is of the opinion that in the interest of mineral development it is necessary to do so, and only if reasons are recorded appropriately by the state government. Thus, in absence of any such opinion or reasoning, the operation of the 26 leases under second or subsequent renewal is not legal.

The bench also looked into the legal status of operation and future activities. Based on finding of the CEC report, the court noted that several lessees were operating without clearances under the Environment (Protection) Act, 1986 and the Forest (Conservation) Act, 1980, and without renewal by the government.

The bench noted that 102 mining leases do not have requisite clearances. However these leases were noted as “non-working” by the CEC as their operations had already been suspended. The bench directed that operation of the 102 leases shall remain suspended under the status quo, but the court is open to such lessees to move the concerned authorities seeking fresh environmental clearances from the MoEF and consent to operate by the state pollution control board (SPCB). The interim order of the court will be modified if these leases can secure the necessary clearances and consents. The same directions would apply to 29 more leases, which have been noted as rejected or lapsed by CEC.

State decision making questioned

Just as in case of the Goa mining, the delay in decision making of the state regarding renewal of mining leases have been brought into question in case of Odisha too. K B Nair, under-secretary with Union Ministry of Steel said that while there is a need to impose time limits by various authorities, closure of mining operations due to delay in decisions by state government on mining lease renewal applications may adversely affect the availability of critical raw materials like iron ore and subsequently affect the steel industry. The state, though, has now been asked to decide within six months, it is time that the capacity and functioning of the state authorities should be seriously reevaluated. This should be a priority for the new government to take into consideration if further illegalities are to be avoided given the inaction in part of the state.


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