MAC: Mines and Communities

Vedanta accused of fraud - yet again!

Published by MAC on 2011-10-18
Source: The Economic Times India, Delhi News Agency (2011-10-18)

As if the catalogue of violations by Vedanta's Goan iron mining subsidiary, revealed earlier this month, wasn't enough,  it's now accused of major fraud.

India's Serious Fraud Office is said to have ordered prosecution of Sesa Goa on eight counts, including its over- and under- invoicing of exports and imports of ore.

Previous article on MAC: The emperor is stripped naked of his clothes

Meanwhile, the government of Karnataka (where Vedanta is also accused of illegally operating)  has "de-listed" all mining projects that are currently awaiting environmental clearance. See: India's Karnataka assaulted by "Iron Fist" - Report

Sesa Goa dismisses SFIO claims; stock down 2%

The Economic Times (India)

13 October 2011

NEW DELHI: Stocks of Sesa Goa slipped lower on Thursday after reports of Serious Fraud Investigation Office (SFIO) being directed by the corporate affairs ministry to initiate proceedings against the mining major.

Mining devastates Goa
Mining devastates Goa. Photo: K. Mohideen

"The Corporate Affairs Ministry is understood to have ordered prosecution against Sesa Goa Ltd on eight grounds, including over and under-invoicing of exports and imports of over Rs 1,000 crore," according to a report.

On the prosecution, P K Mukherjee, Managing Director, Sasa Goa, in an interview with ET Now said, "We are yet to hear anything from Ministry of Corporate affairs about this since end June when we submitted our comments on SFIO Report to them."

"As and when we receive any further communication in this regard, we'll deal with it appropriately," added Mukherjee.

"The SFIO has also alleged that Sesa Goa made excess payment of agency commission to sales agent amounting to Rs 40.6 crore to facilitate its exports of iron-ores to foreign buyers," added the report.

"Commissions are paid in the business interest and enough documents are provided to show how these commissions are benchmarked with other companies and we dismiss any allegation in that respect," said Mukherjee.

"We have also given enough documents to support the invoicing transaction as well and the same are given to SFIO," added Mukherjee.

At 10:26 a.m., shares of the company were trading 1.3% lower at Rs 225.75. The stock has touched its day's low of Rs 224.10, down 2.1%.


Environment Ministry to delist all mining projects in Karnataka

Delhi News Agency (DNA)

22 September 2011

Following the Supreme Court's order banning mining in three Karnataka districts including Bellary, the Union Ministry of Environment and Forests (MoEF) has decided to de-list all mining projects in these areas that are awaiting environmental clearance.

By two of its orders in July and August 2011, India's apex court had banned mining operations in Bellary, Tumkur and Chitradurga districts of Karnataka.

Taking that in view, the MoEF said, "It has been decided that all the mining projects which are pending for environmental clearance and are at different stages of consideration, both in Ministry of Environment and Forests as well as in State Environment Impact Assessment Authority (SEIAA) will be de-listed."

"Those projects which have not yet been placed before the Expert Appraisal committee (EAC) or the State Expert Appraisal Committee (SEAC) will be returned," the ministry said.

The environment ministry has also decided that it will not consider any mining proposal from these three districts till SC lifts their ban on consideration of projects from these areas.

"The prospective project proponents are advised not to submit any mining proposal for environmental clearance till such time the ban is lifted," the ministry added.


Dear Sesa Goa. What do you call this-- legal or illegal?

The Herald

18 October 2011

Suraj Nandrekar

Did Sesa's earlier avatar Dempo, misrepresent facts to get EC clearance for Bicholim mine?

- As promised Herald visits one more mine to dig out the facts

Arial photo of Sesa Goa

There are three lakes and a 1.4 km stream passing through
the lease. Photo: The Herald

BICHOLIM: This is a story of how "legal mines" flout rules to get the Environment Clearance from the Union Ministry for Environment and Forests, and are actually more illegal then "legal". Or so we think. Before we proceed with this story, we would like to inform our readers that notwithstanding the thoroughness of our investigations, we sent questions to Sesa Goa to clarify and revert. Sesa has not reverted back with any clear answers in three days.

In a reversal of sorts, we reproduce what Sesa said first and leave readers to decide after reading the story if these comments are justified. R Krishnagopal Associate Vice President, Corporate Communication, Sesa Goa Limited said "Sesa wishes to inform that the matters referred by the publication are very old and pertain to a period in the past under a previous management (Dempo)."

" Under these circumstances, it is only incumbent that Sesa refers to records and appropriately responds with facts. It is reasonable that we are given time to do so."

Herald has in possession documents which prove that the Bicholim iron ore mine, which was once owned by the erstwhile Dempo Mining Corporation Pvt Ltd and now Sesa Goa Ltd, has submitted grossly incorrect information report through its consultants to get the EC.

The said mine earlier had extraction permission for 0.2 million tones annually and in 2003, Dempo applied for increase in extraction capacity to 2 million tones annually.

To get the EC for this, Dempo engaged a consultant-- Central Mining Research Institute at Dhanbad, Jharkhand--to prepare an executive summary on the EIA-EMP for the said mine.

The consultants, instead of giving the true picture, seem to have given a false environment impact assessment. Here's how:

The report says that "There are no rivers or surface water bodies (perennial or seasonal) within the lease boundary."

However, in reality there are three lakes and a 1.4 km stream passing through the lease (see Google earth image).

Herald is in possession of a 2001 deed between the government and Dempo Mining, which says survey numbers 22 to 28 of Lamgao village fall within lease and interestingly survey number 22 (675 square metres), survey 25 (3375) and survey 26 (11050 square metres) are lakes according to mamlatdar and panchayat records, which belonged to government.

Also, when Herald visited the sites, the lake in survey 26 is completely silted due to mining water flowing from atop the hill

The EIA report further says there are no noticeable connections of water table among the open pit mines, nearby villages and Mayem lake because of impervious layer. Hence there can be no significant impact of mining on the surrounding water table."

Contrary to this claim of the report, Herald understands there is a complaint pending with the Bicholim mamlatdar by the Mandrekar Wadda residents, saying wells in the area have run dry due to mining sediment.

Significantly, the Mandrekar Wadda wells fall within 150 metres of the actual pits.

Also, the report also says that mining has no effect on the Mayem lake, which is a popular tourist point of Goa. Residents have contested this claim saying the Mayem lake is completely silted and the effect can be seen during monsoon when the lake turns completely brownish red in colour.

The mine, which stretches from Shirgao, Mulgao, Lampgao, Bordem, Mayem, Bicholim and Pilgao, was also a reason of severe flooding in 1981 due to siltation in Bicholim river, says a report by Department of Mines and Geology and the Department of Agriculture, which probed into the matter.

The 1997 report of the Tata Energy Research Institute has stated that the mine was a cause of siltation in the river and the 1.4 km stream which flows from the mine.

So what does Sesa now have to say to this? On paper, this is all legal. But given the facts of this case, what should we call this--legal or illegal mining?

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