Mumbai: Steel manufacturers and miners with operations in Odisha
fear iron ore prices could rise if the Supreme Court decides to act on the Shah
Commission’s report on illegal mining in the state.
The justice M.B. Shah Commission
report on illegal mining of iron and manganese ore in Odisha, tabled in
Parliament on Monday, said 80% of the mines in the state were illegal and that
around Rs.59,000 crore worth of ore was mined illegally between 2008 and 2011.
The report asked for a Central
Bureau of Investigation (CBI) inquiry. In the action taken report, the central
government sidestepped the issue of having CBI investigate the case; said the
environment ministry would institute measures to prevent degradation of the
environment on account of mining (and listed the measures); and passed the buck
to the state.
In the same report, the state said
it had already issued notices to several companies, denied that the instances
of illegal mining were as rampant as suggested by the commission’s findings,
claimed no politicians were involved in any of the instances of illegal mining,
and said there was no need for an investigation by CBI.
However, the 180 miners and steel
makers named in the Commission’s report are worried that the Supreme Court,
which is hearing a case on illegal mining in Odisha, could take the findings
into account.
The Supreme Court on Monday said it
would hear legal activist and Aam Aadmi Party leader Prashant Bhushan’s plea seeking a CBI
investigation into illegal mining in Odisha on 3 March.
“In case any adverse action is taken
by the Supreme Court, iron ore and manganese ore availability and consequently
the production of sponge iron, pig iron, ferro alloys and steel will be
severely affected,” said a spokesperson in JSPL, adding the company did not
violate rules.
“Hundreds of small, medium and large
industries not only in Odisha but in adjoining Chhattisgarh, Jharkhand and West
Bengal will be closed down or their production will be drastically cut down,”
this person said.
Spokespersons of Tata Steel and Essel said they would need to study the entire
report before commenting. A spokesperson for Tata Steel said that only one part
of the report had been tabled in Parliament on Monday.
“We have followed all the rules and
regulations in force,” said a spokesperson of SAIL. “We are examining the
report and in due course, we will react to it.”
Tata Steel has the largest mining
operation in the mineral-rich state with seven iron and manganese ore mines and
a new 6 million tonne (mt) integrated steel plant in Kalinganagar.
Three of its mines—Joda East,
Khondbond and Katamati—produce about 8-10mt of iron ore that comprises about
50% of the iron ore input for its Jamshedpur steel plant in Jharkhand.
The other mines—Joda West, Guruda
Tiring Pahar, Malda and Bamebari—have manganese ore, which is used in the same
Jamshedpur plant.
SAIL owns three captive iron ore
mines, Bolani, Barsua and Kalta. JSPL owns one captive iron ore mine, Tensa.
In 2010, M.B. Shah was asked by the
central governmentto study illegal mining in iron and manganese ore across
India. Since then, the commission has submitted an interim report on illegal
iron ore mining across India, and another on illegal iron ore mining in Goa.
Mining in Karnataka was banned by
the Supreme Court in 2011, although this was allowed to resume, in stages, in
2013. Full production in the state is yet to resume. The court also stopped
mining in Goa in 2012 and continues to hear a case on this.
Steel and mining executives fear a
similar fate for Odisha, and say this could cripple the industry. In 2013-14,
Odisha is expected to produce 70mt of iron ore, 45% of India’s production.
“The Supreme Court can act without
regard to the economic situation,” said Rakesh Arora, managing director and head of
research at Macquarie Capital Securities (India) Pvt. Ltd,
“but Odisha is different maybe because much of the ore produced is for captive
use and also the state government there has taken a lot of clean-up measures in
the last few years.”
Many companies are already fighting
a fine imposed by the Odisha government in 2012. The fine was stayed by the
mines tribunal under the Union mines ministry.
Tata Steel has been fined Rs.5,900
crore by the state, Mint reported on 6 January 2013. But this matter may
take years to settle with the possibility of the companies filing legal
petition in the courts in case they are not satisfied with the mines tribunal’s
ruling, company executives said.
Their immediate concern is the
Supreme Court case.
“We are not clear what the objective
of this case is, but if they ask for a complete ban on mining, it will be very
harmful for all of India’s economic growth,” said one executive working for one
of the companies that operates in Odisha. He asked not to be identified.
Rahul kumar Gupta
PGDM,1st Year.
Source:-MINT..
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