Yeddy, Reddy, Kamat? Goa's Rs 800 cr mining scam is next

The country’s mining scandals have claimed one chief minister already. On 5 September, the Central Bureau of Investigation (CBI) arrested G Janardhan Reddy , former Karnataka minister, for the Obulapuram Mining Company’s role in illegal mining as documented by the Karnataka Lokayukta in July. Since the CBI is said to be probing the roles played by as many as 65 mining companies, the logical question is: who will be the next big fish to be caught in the net? The Goa Chief Minister, Digambar Kamat, bids fair to be the next target of inquiry. Official data and documents accessed by Firstpost  on show that he either aided or abetted or looked the other way when illegal mining activities running into over Rs 800 crore were taking place. And this figure refers to only illegal mining over the last four years. For example, Goa government records show that there are 90 active iron ore mines in the state. But 48 of them were shown to be extracting more than what their environmental clearances (EC) allowed them. In other words, more than half the mines are breaking the law – and Kamat has done little to rein them in. [caption id=“attachment_76378” align=“alignleft” width=“380” caption=“Data  accessed by Firstpost show that GOA CM Digambar Kamat either aided or abetted or looked the other way when illegal mining activities, running into over Rs 800 crore, were taking place.AFP”]  [/caption] Anil Agarwal’s Vedanta Group – a mining and metals conglomerate that has courted controversy wherever it pitches its tent – is prominent in this law-breaking. Vedanta owns two major Goan mining companies – Sesa Goa and Dempo — which control 30 percent of the Goan mines. Kamat’s daughter is married into the Dempo family that used to control the company before it was acquired by Agarwal in 2009. Eighteen of the 48 excess mining cases involve Sesa Goa and VS Dempo. Firstpost mailed a questionnaire to Vedanta, but got no response to it. Asked why he allowed illegal mining that went against EC recommendations, Digambar Kamat deflected the blame. He told Firstpost: “The EC limit is given by Ministry of Environment and Forests. Thus the Implementation of the EC clearance is the responsibility of the Ministry office located in Bangalore and also by the Pollution Control Board. Anyway, we are in the process of sending them notices.’’ Kamat, who has been minister for mines for 12 years, has allowed his own ministers and close aides and partymen to become ‘raising contractors’ and run iron ore mining businesses. He has also helped revive mining leases that date back to the era when Goa was a Portuguese colony, ignoring the new mining laws that were legislated later. That the chief minister of a state which derives a lot of its income from tourism, and where illegal drugs and the flesh trade flourish, should consider mining to be the most important ministry itself tells a story. Most CMs in the country retain the home ministry or critical ones like finance or industry, but not Kamat. Says Goa’s former Chief Minister Manohar Parrikar: “Kamat has been mines minister for years now. Everything else has changed, but his one portfolio hasn’t changed — that is mines. I could understand it if he was the minister only for only two-three years. But for 12 years, he has been mines minister. Kamat can’t absolve himself of every illegality and criminal conspiracy in the mining department.” [caption id=“attachment_76381” align=“alignright” width=“380” caption=“Huge Mining pit of Vedanta’s Sesa in South Goa. Photo: Raman Kirpal/Firstpost”]  [/caption] A whiff of Goan mining scandal was available when former Karnataka Lokayukta Santosh Hedge gave his report on illegal mining in Bellary. He hinted that Karnataka ores were being shipped to Goa for blending with the local ore – which have a low ferrous content. The numbers speak for themselves. Goa has barely 5 percent of the country’s iron ore reserves, but it exports 40 percent of the country’s total. The Chinese have been willing to buy anything from the Goans. Kamat took a fancy to the mining ministry as far back as 1998, when he was a BJP MLA. In 2003-2004, when China was preparing for the Olympics, Kamat as mines minister presided over an export boom to China. Earlier, Goan ore was largely shipped to Japan, South Korea, the UAE, Pakistan, Netherlands, Romania and Italy. Within a year of Kamat’s entry, China became the major importer of low-grade Goan iron ore. Continues on the next page The Chinese purchased all the rejects and dumps, which were earlier being rejected by the mining companies as waste. In 2009-2010, China imported 31.5 million tonnes out of Goa’s 45 million tonnes of iron ore exports, according to the Goa Mineral Ore Exporters’ Association. The Beijing Olympics were probably built on Goan ore. [caption id=“attachment_76400” align=“alignleft” width=“380” caption=“Cheryl with her daughter Aki. They  are fighting Digambar Kamat’s Minister Joaquim Alemao. The latter wants them to sell their farmhouse to him. Photo by Raman Kirpal/Firstpost”]  [/caption] Kamat had a big role to play in this sea change. In 2003, he was mines minister in Manohar Parikkar’s BJP government. In 2005, he defected to the Congress, when the Chinese boom was at its peak and the Congress was back in power. He remains the Mines Minister. To understand why illegal mining is rampant in Goa, some history is in order. During Portuguese rule in Goa, some prominent local families, including Sesa, Dempo, Chowgule, Salgaocar and Timblos, were granted rights to mine iron ore in “perpetuity.” These families were given 336 such mining rights, called Title Concessions (TCs). These TCs should have come to an end when the Indian Government enacted a new law in 1987 for Goan mines. The Goa, Daman and Diu Mining Concessions (Abolition and Declaration as Mining Leases) Act, 1987, abolished all the Portuguese TCs and asked these families to apply for mining leases within a year’s time. It was also made mandatory for miners to get their leases renewed every 20 years, and all mines had to take environmental clearances (ECs) for each mine. When these families moved the Bombay High Court against the 1987 law, they failed to get relief. In 1997 they appealed to the Supreme Court, which directed them to comply with all the conditions stated in the 1987 Act till the case was decided finally. Fourteen years hence, the case is still in the Supreme Court. But that did not stop Digambar Kamat from bending the rules to favour miners and politicians. Goa government records say only 90 mines were active in 2011. Of these 90 mines, 48 were found extracting more iron ore than the quantities prescribed under the EC limit during the past four years. The Ministry of Environment and Forests, when Jairam Ramesh was minister, had ordered a ban on fresh mining clearances till the matter is fully studied. Sample these violations: • Vedanta-owned Sesa Goa Ltd is permitted to extract 70 lakh tonnes from three mines annually (TC 126/53, 69/51 and 70/52), according to the EC limit. But it extracted an additional 1.68 lakh tonnes during 2009-10, according to official data. • Vedanta had an EC limit of two lakh tonnes annually in mines with TC numbers 9/49, 10/49 and 3/54. In 2006, it has extracted six lakh tonnes more than the prescribed EC limit • The EC limit for VM Salgaocar & Brothers Pvt Ltd was 16.92 lakh tonnes in four mines (TC nos 628/52, 19/58, 29/54 and 83/52). Salgaocar extracted 10 lakh tonnes more since 2006. • VS Dempo (owned by Vedanta) has an EC limit of 11 lakh tonnes in three mines (TC Nos 20/54, 21/54 and 5/54. Dempo extracted 9.89 lakh tonnes of iron ore in addition to the EC limit in 2008. • Chowgule & Co Ltd had an EC limit of 4.2 lakh tonnes from three mines (TC No 12/57, 38/51 and 22/50). It extracted an additional 4.6 lakh tonnes over and above the EC limit since 2006. The list goes on and on as there are 48 of them breaking the EC limits. According to available records, over 95 lakh tonnes of iron ore were illegally mined during the past four years and its rough cost is nearly Rs 800 crore. In addition, export records available at two exit points in Goa reveal that during the last financial year (2010-2011) alone, 50 lakh tonnes of iron ore may have been illegally mined and exported. The export price of 50 lakh tonnes is Rs 400 crore at the rate of Rs 800 a tonne.