Vedanta’s sister company Sesa Goa has openly flouted the 10 sq km limit area for mining set under the Mines and Minerals Regulation development (MMRD) Act. Despite having permission to export only 76 lakh tonnes of iron orein Goa, it exported ore worth 1.5 crore tonnes, signalling a collusion of the BJP state government, its various departments and the Sesa Goa Company.

A mine in Goa

Sesa Goa mines iron ore in Goa alone and sells it to Indian and foreign companies. While the environmental losses on account of the illegal mining in the state cannot be measured in terms of money, the financial losses to the state due to draining of its natural resources runs into thousands of crores of rupees. While the illegal mining went on unabated,the Bharatiya Janata Party (BJP) government in Goa led by Chief Minister Manohar Parrikar and Sesa Goa profited equally. In 2010-11, the Goa government made a net profit of Rs. 4,290 crore through all its sources while Sesa Goa made a net profit of Rs. 4,222 crore, a difference of just Rs. 68 crore.

A company which makes a profit almost equal to that of the state government is in a good position to pressure the government,

says Claude Alvares, secretary and executive director, Goa Foundation, an NGO and action group of Goan environmentalists. The Goa Foundation has alleged that Sesa Goa has violated all the rules of the MMRD Act. As per Section 6 of this Act, no company can be given permission for mining in an area larger than 10 sq km. Goa Foundation claims that the net area for which Sesa Goa was given 21 mining leases included a total area of 1,556.0931 hectares, which is more than 10 sq km.

Sesa Goa surrendered some of the leases, after which — as per the directions of the Controller of Mining Leases of India — the company had a total of 14 leases, which covered an area of 880.4758 hectares, well within the limits set under Section 6 of the MMRD Act. But in 2004, the company bought a mine and in 2006 bought out the Dempo Mining Group, which had 21 mining leases. Later, the company also acquired leases for mining at four places, taking the total leases to 40 and the total area under mining by the company to 36 sq km, a clear violation of Section 6 of the MMRD Act.

“The leases that Sesa Goa has for mining is spread out over 36 sq km, where mining is going on. This is a blatant violation of Section 6 of the MMRD Act,” says Alvares.

Permission to mine 7.6 lakh tonnes iron ore but exports almost double

Trucks carrying iron ore from the mines.

As per documents available with Gulail, out of the 14 leased mines that Sesa Goa had, mining was being done only in eight. The Environmental Department of the state had given the company permission to mine only 7.6 lakh tonnes of iron ore from these eight mines per year. However, according to the Goa Mineral Ore Export Association (GMOEA), Sesa Goa exported iron ore worth 1.5 crore tonnes in 2010-11. It is questionable as to how the state government and the customs department kept mum on the issue even after the GMOEA published these figures. It signals towards a collusion of the BJP stategovernment, its various departments and the Sesa Goa Company.

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Gulail contacted the office of Vedanta in Delhi for their reactions on the issue. We were given the contact number of Sesa Goa’s Sanjeev Varma (982…411), who refused to discuss the matter over the phone and instead asked for a questionnaire to be mailed to him. Gulail mailed him a questionnaire asking for comments about the alleged violations of MMRD Act and export of ore more than the quantity allowed. However, no reply was received till the time of uploading of this story.[/jbox]

The Goa Foundation’s Alvares, who played an important role in exposing the illegal mining, says that apart from its own leased mines, Sesa Goa also got into agreements with smaller players in the state and acquired iron ore from them to sell in the domestic and international markets. Alvares says that an analysis of the profits made by Sesa Goa shows that it netted a total profit of 600 per cent. In 2010-11, the company invested Rs. 700 crore in Goa and ended up making a profit of Rs. 4,222 crore. Alvares says that the government needs to set up a committee to examine how the company made such a huge profit and how much the possible loss to the exchequer could be?

Losses worth Rs. 35,000 crore: M.B. Shah Commission

The M.B. Shah commission, which was set up to probe the illegal mining allegations in Goa, has revealed in its report that illegal mining has been rampant in the state. Many companies have been involved in illegal activities and have used various techniques to further their ambitions. These companies have not only violated rules but have also indulged in stealing of minerals and illegal mining of areas for which they did not have leases. The report says that due to the illegal mining in non-leased areas between 2006 and 2011, the state suffered a loss of Rs. 34,936 crore. If other techniques employed for illegal mining is taken into consideration, this figure would increase manifold.

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The Goa Foundation has put the role of both the ruling BJP and opposition parties in the state under the scanner. Sesa Goa — or Vedanta–gave Rs. 1.3 crore to the Goa unit of the BJP and Rs. 55 lakh to the Congress as donation, which the company has declared. The Goa Foundation says it is impossible for the political parties to act against the company after accepting such huge donations.[/jbox]

The mining in non-leased areas can be termed as stealing of resources, as the commission has pointed out. But the extent of real illegal mining can be gauged if the profits made by various companies are analysed. In 2010-11 the total profit made by the mining companies in Goa was Rs. 15,000 crore. This profit could have been made by the government-owned companies had the contracts been given to them. Also, had the state government awarded contracts based on only the mining costs, it would have had to spend only Rs. 600-700 crore, helping it make a profit of more than Rs. 14,000 crore. Based on this figure, the losses over the past 10 years come to over Rs. 100,000 crore.

The Supreme Court has expressed displeasure over the mining policy adopted by the Goa government, which has left the state in a fix. The government fears that its economy could become unstable if the ban on mining is not lifted. But the question is whether the illegal mining activities in the state will stop after the ban is lifted, which the government feels is possible by November this year. The time is ripe for a national mining policy to be formulated to keep the illegal mining and loss of country’s natural resources in check.

Updated on 15 Nov 2013