How they struck gold in Orissa’s iron mines

The Vigilance Department has raided the offices and mining sites of S R Rungta Group’s Rungta Mining and M Serajuddin so far. Several other companies are under the scanner too,but all say they mined ore as per the law. Also involved are officials of the state Mining Department and Forest Department who turned a blind eye to the overmining and violation of forest laws. Though the complicity of Chief Minister’s office is yet to be established,the Opposition BJP alleged that the scam trail leads to his office as any file relating to mines and minerals are routed through him.

HOW THE SCAM HAPPENED

Any mining company or operator before digging up even a handful of earth in the ore-rich areas has to go through a maze of procedures and permissions from the Orissa Pollution Control Board (OPCB),Mines Department,Ministry of Forests and Environment (MoEF) and Indian Bureau of Mines (IBM). After they get the mining lease,the operators have to obtain a Consent to Operate (CTO) certificate from the OPCB which stipulates the amount of ore that can be mined in a year. The limit is specified with an eye on collateral environmental damage that mining brings,as the waste and overburden (the earth that needs to be excavated for extracting the ore) is normally three-five times the volume of the actual mineral. When environmental 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 is specified in the mining plan which is approved by the IBM.

The operators flouted the laws,at times mining 30-40 times of the specified limits. There was breakdown of the regulatory mechanism. In spite of field reports by local officers /notices from MoEF about the gross irregularities and violations of the environmental norms,no action was taken by the OPCB to shut down the mines or withdraw the clearances.

HOW THE SCAM WAS EXPOSED

During the Assembly session in July this year,the Opposition BJP alleged that Ram Bahadur Thakur Ltd (RBT),a mining company based in Bihar,was illegally mining manganese ore in Keonjhar district without any mining lease and with the complicity of State Director of Mines and his subordinates. The BJP alleged that one Shakti Ranjan Das was mining manganese ore on behalf of RBT in two mines at Rudukela and Katasahi of Keonjhar district though no mining lease was granted.

Rattled by these charges,the government ordered a probe by the Vigilance Department which found that though the grant of mining lease of RBT Ltd was pending since 1996 for lack of compliance from the applicant and necessary clearance from the Government of India,one S N Dasmohapatra in the garb of representing RBT extracted ores from the RBT area as well as the area for which he had submitted the application but had not got any approval. Dasmohapatra was found to have lifted 52,376 tonnes of manganese ore illegally from the proposed lease area of RBT,government forest land and safety area. The total value of manganese illegally raised by Dasmohapatra was found to be Rs 110 crore. Eight people,including five officials of the Mines Department and two from the Forest Department,were arrested.

Is the investigation satisfactory?

The state Vigilance Department has never handled such a scam before and they lack expertise and experience. Multiple departments like mining,forests,pollution control,revenue and sales tax have to be investigated to assess the total scam value. As a knee-jerk reaction,the Vigilance police promptly arrested lower level mining and forest officials as well as businessmen involved with the mines. Since the investigations were not up to the mark,all the accused were out on bail within a week of the arrests. Opposition parties and civil society activists say unless a national competent agency like the CBI or NIA steps in,the guilty would go unpunished and the loot of minerals would continue as before. There have been a couple of petitions in Orissa High Court seeking CBI probe,but no decision has been taken.

What led to the scam?

Between 2003 and 2007,when iron ore prices jumped from Rs 400 to Rs 4,000 a tonne in the international market and everyone wanted to make money from the boom in the mining sector. Everyone made a beeline to Orissa to sign MoU for setting up steel units,but with an eye on the rich mineral reserves of Keonjhar and Sundargarh districts. Even the otherwise slothful bureaucracy of Orissa bent over backwards to please the companies. Everyone was rushing to Keonjhar for a pie in the mining boom as many became rich overnight while iron ore exports through Orissa ports shot up like never before. The upshot of the boom was that 2004 and 2009 Assembly elections in Orissa saw the most expensive campaigns in the state’s history. In Keonjhar,there were more crorepati candidates than anywhere else.