Any action that prevents the mining operation in Odisha will greatly hamper the country's export and the domestic market

Justice MB Shah Commission's report on the illegal mining activities going on in Odisha, submitted recently, has been put on the backburner, for the time being, as the Cabinet has decided to refer the matter to a Committee of Secretaries.

The full report has not been made public and only leaked versions have appeared in the press. From these, it appears that 94 miners had carried out mining operations without the mandatory clearance under the Environment Protection Act, 1972. According to information available, there are 192 mining leases in Odisha; 176 of them are located in dense forest areas, and 94 of them were actually operating without environment clearances.

Of the 94 leases, 53 mines were extracting iron ore and 25 were mining manganese. Out of the 192 mining leases it was found that 75 lessees had mined more iron ore than what they were permitted to do, and now the Ministry of Environment and Forest (MoEF) "intends" to ask the State to act against illegal mining, and to tell these miners "not to dig the mine illegally in the future".

Such large scale violations have been going on since 1994-95 and most of the mining lease holders violated the rules in some form or other, with impunity. All these are not possible without the active collusion of officials and now the MoEF will seek a report from the State to take suitable action against the offenders. The Shah Commission points out that, at present, the MoEF has ordered violators of forest regulations to plant more trees as a "penal compensation" or pay extra penal funds as "net present value" of forest land used. This practice has no legal basis and violators should be charged under the provisions of the law, leading to jail terms, according to the Commission.

All this means a great loss of revenue for the State and this illegal mining has been estimated to be worth about Rs60,000 crore by the Shah Commission, which holds both the Centre and the State responsible for this mess and it has directed Odisha government to recover over Rs59,203 crore from the miners concerned. When the Action Taken Report is submitted by the Committee of Secretaries, the report is likely to be tabled in the parliament.

The list of firms involved in these activities would be too long to reproduce. Suffice to say, such organisations like SAIL, Tata Steel, Aditya Birla group, Essel Mining and Odisha Mining coporations are among the 70 firms who appear to have violated environmental and forest clearance as per Shah Commissions Report.

In the meantime, in order to ensure that the visit of South Korean President Park Geun-hye goes well, the MoEF, hurriedly cleared and gave POSCO steel plant (not the captive port, mind you) the green nod, as this steel plant is scheduled to initially make 10 million tonnes of steel, which will be increased to 12 million in due course, when their own captive iron ore and coal mines start operating, though, again, they will be basing on imported coal for the time being. POSCO project is estimated to bring in the country's largest foreign direct investment (FDI) of Rs52,000 crore.

Moneylife readers are aware of the recent coverage on President Park's visit to India and the growing importance of trade with that country. It is therefore gratifying to note that MoEF acted, under the leadership of Veerappa Moily as minister, cleared the pending issues of POSCO steel plant, though there are some objections by a section of the people down there.

Odisha is India's largest producer of iron ore, mining about 45% of the143 million tonnes. Due to the Supreme Court's directive, mining is totally banned in Goa, while it has been recently lifted, conditionally, in Karnataka, where it has just restarted. For lack of iron ore, the domestic industry has suffered, displacing the livelihood of 100,000 people or more in Goa. A similar strong action in Odisha will also result in untold misery to the miners.

As the situation becomes serious in Odisha, the MoEF proposes to amend the rules to make compensatory afforestation legal and promises to amend the regulations to make initiation of action against violators mandatory, and the States concerned will have to act promptly and efficiently on such matters. As for as Odisha is concerned, according to the Shah Commission, good quality iron ore in the State will only last for 30 years, provided it is extracted at the rate permitted by the Indian Bureau of Mines and the MoEF. Illegal mining has to be stopped at all costs, and mining to be done only by legitimate lease holders bearing in mind their responsibility to safeguard the environment concerns.

It must be noted that fall in production of iron ore has not only affected our own domestic steel industry, but has given the required impetus for suppliers, our competitors, like Brazil, Australia to take the export market. The current ban on iron mining, for instance, in Goa has meant the loss of export of more than 100 million tonnes, estimated to cost $6 billion and any action that prevents the mining operation in Odisha will greatly hamper the country's export and the domestic market. This does not mean that the government must close the eye and permit reckless mining anywhere in the country, but strict regulations need to be set so that work does not suffer.

India's known mineral resources are large, with untapped and unknown and unexplored resources all over the country. Mining operations and regulations to protect environment effectively are needed so that we have something concrete left for our future generations.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)