India loses $210bn in coal sales in "mother of all scams"Published by MAC on 2012-03-27
Source: Economic Times, Reuters, statements (2012-03-26)
Vedanta, Tata, ArcelorMittal and Adani are among a hundred companies, said to have benefited from the "fixing" of recent Indian coal contracts - to the tune of US$210 billion.
Indian Prime Minister, Manmohan Singh, has argued that newspaper reports on the "scam" are "misleading".
However, on Monday this week, came allegations that Tata had engineered the diversion of coal resources from state-owned Coal of India Ltd itself.
At a recent meeting, convened by the National Alliance of Peoples' Movements, 500 people from Bihar and Uttar Pradesh highlighted their own struggles against destructive coal-fired power plants, demanding the revocation of an "illegal clearance" granted to Adani Thermal.
CAG: Government lost Rs 10.7 lakh crore by not auctioning coal blocks
Economic Times of India
22 March 2012
NEW DELHI: The CAG is at it again. About 16 months after it rocked the UPA government with its explosive report on allocation of 2G spectrum and licences, the Comptroller & Auditor General's draft report titled 'Performance Audit Of Coal Block Allocations' says the government has extended "undue benefits", totalling a mind-boggling Rs 10.67 lakh crore, to commercial entities by giving them 155 coal acreages without auction between 2004 and 2009. The beneficiaries include some 100 private companies, as well as some public sector units, in industries such as power, steel and cement.
|Coal mining caused six times more loss than 2G
Source: Times of Andhra Pradesh
Here's how the auditor has calculated the "windfall gains". First, an estimate of the cost of production for each block was arrived at by taking into account the actual cost of production in a similar Coal India mine for the same year. Then the difference between CIL's sale price and cost of production was multiplied by 90% of the reserves in each block. The figure thus obtained was the windfall gain for that block.
The reasoning behind taking 90% of the total reserves rather than the entire lot, according to CAG, is that "detailed exploration establishes reserves at a confidence level of 90%". The report points out that the coal ministry had maintained in 2004 that the chances of any allocatee not being able to recover this much from the reserves "would be, if at all, very remote". CAG has added that "the actual amount of gain to the allocatees may change depending upon the mining plan, cost of extraction of coal, market price of coal and quality".
The 110-page draft report, a copy of which is with TOI, takes into account the coal ministry's views and, sources say, is as good as a final report. It is expected to be tabled in Parliament after the Union Budget is passed. Calculated on the basis of the 90% of coal reserves indicated in the geological reports for each block, the auditors have worked out a total of 33,169 million tonnes (MT). Industry sources say this would be enough to fuel over 150,000 mw of generation capacity-a little less than the country's current level-for 50 years.
The report has listed both private entities and public utilities as beneficiaries of the alleged largesse. It says private firms cornered more than Rs 4.79 lakh crore of the giveaway, while around Rs 5.88 lakh crore went to government utilities. Significantly, most PSUs employ private miners to extract the coal.
Among the major private sector beneficiaries are Tata Group entities, Jindal Steel & Power Ltd, Electro Steel Castings Ltd, the Anil Agarwal Group firms, Delhi-based Bhushan Power & Steel Ltd, Jayaswal Neco, Nagpur-based Abhijeet Group, and Aditya Birla Group companies. Essar Group's power ventures, Adani Group, Arcelor Mittal India, Lanco Group and a host of small to medium players also figure in the list.
A major player in power, Reliance Power, which is setting up the Sasan and Tilayia ultra-mega power projects (UMPPs), is missing from the list because the section on "Windfall benefit to private companies" does not include 12 coal blocks given for the government's showpiece power projects as they were allocated through a tariff-based competitive bidding route.
(The blocks given to Reliance Power are dealt with in a separate section, which TOI first reported on February 15 and March 5. CAG's estimate of the "undue benefit" to Reliance Power for these two projects is now placed at Rs 15,849 crore over a 25-year period.)
Spokespersons for the Tatas, Adanis, A V Birla Group and Essar declined to comment. Bhushan Power spokesperson did not respond to a text message. Repeated attempts to get a response from the Abhijeet Group's Delhi office also were in vain.
But Jindal Steel and Power Ltd promoter Naveen Jindal responded, saying: "It is all project specific. Often you find (state-run) companies unable to start work. I am proud to say that JSPL has started two of our blocks and is contributing towards creating wealth for the country. For all these 155 blocks, Coal India did not have any mining plans as it found them unattractive... CAG may have its view but whether it is JSPL or any other private company, they are all Indian entities and are creating wealth for the country."
Among the public sector entities that have benefited the most are central generation utility NTPC and trading firm MMTC, several West Bengal government corporations, and mines and mineral development corporations of Chhattisgarh, Jharkhand and Madhya Pradesh.
Senior executives of several companies, on condition that neither they nor their company be identified, said many of these blocks are yet to be transferred. Some others said mining has not started in several mines in the absence of various clearances. However, a few agreed that there might have been some unforeseen gains as coal price has risen since the allocations. "If the draft report talks of windfall gains, it shows CAG's lack of sense of time or knowledge of market realities. It fails to see the price of everything-from fuel, equipment to wages and industrial services-has risen in this period," said a top executive with one of the companies in CAG's list of beneficiaries.
The coal ministry's justification, quoted in the report, is not dissimilar: "... coal produced from captive blocks was not available for commercial sale and out of 137 blocks, 62 coal blocks were allotted to power sector where tariff is regulated on the basis of input costs and the transfer price of coal is assessed on actual cost basis. In case of steel and cement sectors, though prices of end products are not regulated, a competitive market ensures the best benefit for consumers."
CAG counters by saying, "While appreciating the constraints and the viewpoint of the ministry, the fact remains that coal being a natural resource ought to have been allocated to private players on competitive bidding as it brings in more transparency and objectivity in the system. In fact, audit observations have also been corroborated by the recent SC (Supreme Court) judgment on 2G spectrum which, inter alia, held that the State is deemed to have a proprietary interest in natural resources and must act as a guardian and trustee in relation to the same."
The draft report adds: "They (private companies) can augment their resources but the object should be to serve the public cause and to do the public good by resorting to fair and reasonable methods. Every action/decision of the State or its agencies/instrumentalities to give largesse/confer benefits must be sound, transparent, discernible and well defined policy. Thus, the State legally owns the natural resources on behalf of citizens and the natural resources cannot be allocated to private hands without ensuring that the benefit of low cost of the natural resources would be passed on to the citizens."
It uses the ministry's view, conveyed to the government auditor in June 2004, to bolster CAG's contention by noting that the ministry itself had said, "...there was a substantial difference between the price of coal supplied by CIL ( Coal India Ltd) and the cost of coal produced through coal blocks allocated for captive mining and as such, there was windfall gains to the allocates, part of which the government wanted to tap through competitive bidding. The windfall gains to the allocatees were expected to be substantial".
The report rejects the ministry's argument that allocations to the power sector need to be viewed in light of the fact that Central Electricity Regulatory Commission (CERC) regulates the power tariffs. The report says such regulations do not apply to merchant power plants set up by independent power producers. "Further, CERC tariff regulations 2009-14, allow normative operation and maintenance expenses for coal- and lignite-fired generating stations as against the actual cost of production of coal. In fact, for steel and cement sectors, the competitive market forces cannot ensure that the allocatee would pass on the benefit of low cost of natural resources to citizens."
The section in the report titled 'Competitive Bidding For Coal Blocks Yet To Commence' points out how "...the policy initiative to introduce competitive bidding with the objective to bring in transparency and objectivity in the allocation process of coal blocks commenced from 28 June 2004. However, the process got delayed at different stages and the same was yet to materialize even after a lapse of seven years".
India loses $210bn in coal sales in "mother of all scams"
22 March 2012
NEW DELHI - India lost up to $210 billion in revenue by selling coal deposits too cheaply, according to a government auditor's draft report, renewing pressure on Prime Minister Manmohan Singh, who is already reeling from corruption scandals.
Opposition parties reacted with outrage in parliament on Thursday to the report, which was leaked to the Times of India. The session was adjourned and the government said it would respond once it had verified the facts.
"We are examining the news report and I have called for records. After that I will reply," Coal Minister Sriprakash Jaiswal told reporters.
The leaked draft from the Comptroller and Auditor General's (CAG) office criticises the government for allocating 155 valuable coalfields to about 100 private and some state-run miners instead of auctioning them off to the highest bidder.
It said the policy undervalued the coal by at least 10.7 trillion rupees, or $210 billion at today's exchange rate.
"This is the mother of all scams," said Venkaiah Naidu, a senior leader in the opposition Bharatiya Janata Party. "The prime minister should reply."
Prime Minister Singh, who himself oversaw the coal ministry during some of the period in question, declined to reply to questions by reporters at parliament.
A similar investigation over the allocation of telecoms licences led to huge protests that rocked Singh's government last year and landed a minister and several company executives in jail. In the telecoms scandal, officials are accused of taking bribes to favour certain companies.
Jaiswal said he was not serving as minister during the period under scrutiny and that the government policy was now to auction coal blocks.
The coal minister was expected to reply in parliament later on Thursday after consulting with the prime minister's office. A CAG source said the report would probably be presented to parliament in the next few days.
(Reporting by Nigam Prusty, Manoj Kumar and Ratnajyoti Dutta. Writing by Frank Jack Daniel; Editing by John Chalmers)
Coalgate: Private companies gained at cost of CIL, suggests CAG draft report
26 March 2012
Private companies to whom the government allotted coal blocks without bidding may have made windfall gains at the cost of state-run major Coal India Ltd, a reading of the CAG draft report on the allocation of acreages suggests.
The report observes that the proposal to take away blocks from CIL for allotment to commercial entities for captive mining was suggested by Tata Sons chairman Ratan Tata as the head of the government's Investment Commission.
Tata made the proposal in connection with initiatives in the power sector and it was agreed to by the Energy Co-ordination Committee (ECC) under the chairmanship of Prime Minister Manmohan Singh in February 2006. The report says that the ECC took the view that since Coal India till then had plans to mine only 150 acreages up to 2011-12, "some 79 blocks (out of 289 blocks reserved for it), which were explored in detail should be made available to NTPC and others for mining".
The ECC argued, the CAG draft report notes, that such a move would be in the interest of increasing coal supplies. Thereafter, the coal secretary advised Coal India to retain only blocks which were projected to go into production up to 2011-12. Subsequently, the coal ministry "de-reserved" 48 CIL blocks with over 9 bt (billion tonnes) of reserves in May 2006.
Earlier, in January 2006, seven blocks of CIL had already been allotted - five to NTPC and two to the Sasan ultra-mega power project awarded to Reliance Power. These took away another 3.78 bt of reserves from Coal India, the report notes. However, the report notes, as of June 2011 no coal had been produced from an overwhelming majority of these blocks despite deadlines having passed.
This was "contrary to the expectations of the Energy Coordination Committee" for earlier realization of production potential offered by these proven coal reserves.
The CAG report notes that CIL was already working on an "emergency production plan" in the Tenth Plan (2002-07) "to meet the surge in demand of coal by advancing the production schedule in 12 existing mines/ongoing projects and by taking up four new projects through outsourcing production of coal and removal of overburden (earth above layers of coal)".
Worried over its future production plans, CIL made repeated requests for additional blocks, which were "not acceded to/acted upon" by the coal ministry. It notes that CIL sought 138 blocks with reserves of over 57 bt in August 2008.
In September 2011, the company tapered the demand to 116 blocks with reserves of 49 bt. Even after two years of CIL's initial proposal, the ministry was yet to take a final decision, "This would adversely affect future production plan of CIL," the CAG draft says. It also notes the government continued to give away explored mines despite objections from CIL and its subsidiaries.
'Coalgate': CAG takes on coal minister, says we don't make basic mistakes
Times of India
28 March 2012
Vinod Rai has trashed the suggestion that CAG's estimate of undue gains to companies caused by govt's failure to auction coal blocks was "fallacious" or "erroneous".
NEW DELHI: Comptroller and Auditor General Vinod Rai on Tuesday trashed the suggestion that the federal auditor's estimate of undue gains to companies caused by the government's failure to auction coal blocks was "fallacious" or "erroneous".
"We are incapable of making fundamental errors as being discussed in media. Our report will make clear all doubts on fallacies (that are) being talked about," Rai said at a seminar on 'Public Accountability and the Role of CAG', organized here by the Institute of Public Auditors of India.
Rai's remarks came a day after coal minister Sriprakash Jaiswal was reported to have dismissed CAG's estimate of Rs 10.7 lakh crore in gains for companies that were given coal blocks as "notional and imaginary." Earlier, on Saturday, finance minister Pranab Mukherjee had made light of CAG's estimates, saying that the auditor changes 90% of its draft reports after factoring in the government's explanations.
Rai's strong defence of CAG would indicate that its final report may not be very different from its draft report. Rai scoffed at the idea of government auditors arriving at figures casually, only to junk them later. "We are acclaimed internationally for our balanced reporting. Our officers are well trained and are so fundamentally strong that they don't do any basic errors. All our audit processes go down three-four layers, leaving no scope for mistakes."
His remarks confirm the estimate in knowledgeable circles that the draft report - reported first by TOI on March 22 - was prepared on the basis of detailed calculations and after detailed discussions with the coal ministry and, hence, was unlikely to be drastically altered.
On Tuesday, Reuters quoted CAG officials to say the final report would be close to the draft report.
Rai seemed angry over suggestions that CAG's figures were products of lazy arithmetic. "They ( CAG auditors) are the best in the world. Both developing and developed countries send their auditors to train with us at our academies," he said. "Effectiveness and robustness of our processes have led us to being appointed auditor for global agencies."
"Effectiveness and robustness of our processes have led us to being appointed auditor for global agencies."
He added that the UN had chosen India over the UK to audit its accounts and policies, even though the British auditors were costing less. Rai denied the charge that CAG had reduced its mandate to a faultfinding agency, while insisting that the auditor cannot but draw attention to shortcomings in the implementation of policies.
"We are not in the business of finding faults. But when we detect some loopholes during the process of audit, we advise the executive to plug those loopholes," he said.
Coal mining caused 6 times more loss than 2G: CAG
Times of Andhra Pradesh
22 March 2012
New Delhi: The Comptroller & Auditor General (CAG) in its draft report on coal mining in the country has accused the government of having given "undue benefits" to a number of companies leading to a loss of Rs 10.67 lakh crore to the national exchequer. The CAG report says that the government incurred the loss as coal blocks were not auctioned between 2004 and 2009, a news paper reported on Thursday. The CAG draft report titled ‘Performance Audit of Coal Block Allocations' said that the beneficiaries include some 100 private companies, as well as some Public Sector Units (power, steel and cement).
Of the estimated loss of Rs 10.67 lakh crore, private firms cornered more than Rs 4.79 lakh crore while around Rs 5.88 lakh crore went to the PSUs, the paper said.
Among the major private sector beneficiaries are, Jindal Steel & Power Ltd, Tata Group entities, the Anil Agarwal Group firms, Aditya Birla Group companies, Essar Group's power ventures, Adani Group, Arcelor Mittal India, Lanco Group, Jayaswal Neco, Electro Steel Castings Ltd, Bhushan Power & Steel Ltd and Abhijeet Group.
While the PSU beneficiaries are NTPC, MMTC, many West Bengal government corporations, and mines and mineral development corporations of Chhattisgarh, Jharkhand and Madhya Pradesh.
The CAG report is certain to cause discomfort to the government during the ongoing Budget Session even as it is yet to overcome the political Tsunami caused by the 2G spectrum scam. The CAG in its report on 2G allocation had found that a loss of Rs 1.76 lakh crore was caused to the exchequer due to faulty auctioning of scare spectrum. The Supreme Court had recently quashed 2G allocations and sought re-auctioning.
India moves to quell coal furore
Frank Jack Daniel
22 March 2012
NEW DELHI - The Indian prime minister's office moved to quell an outcry over a reported $211 billion loss in revenues from the sale of coalfields on Thursday, after months of pressure over a slew of scandals that have weakened the government.
The Times of India earlier published part of a leaked draft report by the auditor's office that calculated massive revenue losses, causing a furore in parliament and driving stocks lower.
However, Prime Minister Manmohan Singh's office released a letter from the auditor's office that described the newspaper report as "exceedingly misleading" because the leaked document was not a final report and the auditor's thinking on the matter had changed.
"The leak of the initial draft causes great embarrassment as the Audit Report is still under preparation. Such leakage causes very deep anguish," the auditor said in the letter.
Singh's government has lurched from crisis to crisis since massive graft in the sale of telecoms spectrum surfaced two years ago. Voters punished the ruling Congress party in regional elections last month and its coalition partners are increasingly rebellious.
The leaked draft from the Comptroller and Auditor General's (CAG) office criticised the allocation of 155 coalfields to about 100 private and some state-run firms between 2004 and 2009 instead of auctioning them off to the highest bidder.
The firms included a subsidiary of the world's largest steel maker, ArcelorMittal. The firm's shares were trading down 3.2 percent in Amsterdam.
The draft said the policy undervalued the coal by at least 10.7 trillion rupees, or $211 billion at today's exchange rate.
In its letter to the prime minister, the auditor backed away from that loss calculation, describing the low-priced sales as an "unintended benefit" to companies that did not mean an equivalent loss to the exchequer.
A sub-index of Indian steel stocks dropped 3.3 percent, while Mumbai's benchmark index closed down 2.3 percent.
Budget was UPA's declaration of War on Aam Aadmi and Aurat
22 March 2012
Jan Sansad Demands End of Company Raj & Corporate Plunder of Jal Jangal & Jameen
Thousands to March from Shaheed park to Sansad Marg and handover Resolutions to Political Parties Representatives & Civil Society Members
New Delhi: The National Jan Sansad concluded its three days with a strong demand for a people's oriented progressive ‘Budget' that will serve as an instrument of Social Change and promote sustainable, just and equitable growth. The Jan Sansad condemned strongly the budget, of about 15 lakh crores, proposed by the Indian Parliament which will only further the interest of corporations and the wealthy urban class.
The Jan Sansad organised by the National Alliance of People's Movements in Rajendra Bhawan in New Delhi has brought together over 350 representatives from 20 different states of India to debate key issues of people's concerns that rarely find mention in the Indian Parliament.
Several crucial issues such as decentralized planning and increased role for Gram Sabhas in policy planning that would contribute to a comprehensive budget were raised by the Sansad. Atleast 40% of the budget should be allocated to the Gram Sabhas for spending at the local level.
Making the connection between corruption and weak economy, Prafulla Samantra of NAPM, Orissa, remarked that the dialogue on corruption is incomplete unless the plunder of natural resources such as land, water, air and minerals is taken into account. Communities demanded that natural resources not be allocated for profit-making businesses without consent of Gram Sabhas. The budget should ensure equitable access to both economic and natural resources.
The previous budgets reveal that while subsidies provided to the corporations amount to over 5 lakh crores, those allocated to the poorer agricultural classes are around one lakh crore. The Saansads argued that restructuring of the Indian tax structure, for instance by imposing estate, wealth tax, gift tax, inheritance tax, will generate adequate revenue which can increase spending on rural social infrastructure. "It is not sufficient that the budget is brought to public forums in the month of January every year. And even this is only an eyewash if none of the issues raised by organisations, trade unions are reflected in the final budget", claimed Prof Arun Kumar, Economist, JNU.
For equitable growth, the budget needs to have adequate and specific allocations for women, dalits, muslims and other minority communities. Speaking against the privatization of the health and education sectors, the Sansad also advocated for a 6% budgetary allocation. Dr. Meera Shiva spoke on the dangers of privatization of the health sector where multinational companies are into all sectors of health including services, insurance, diagnosis, and education. Their control over the patents, further facilitated by free trade agreements and WTO is denying access to millions of people across the world. The Union Budget has to stop promoting these agreements and must immediately withdraw from undemocratic processes like WTO and other bilateral trade agreements.
The days's panelists included Medha Patkar, K.B.Saxena, Dr Satyajit Singh, Amitabh Behar, Prof Arun Kumar, Meera Shiva, Kamal Nayan Kabra, Madhu Baduri, Sumit Chakravarthy, and Praful Bidwai
While the Jan Sansad sessions continued, on the occasion of World Water Day, movement groups fighting water privatisation, dams, thermal and nuclear power plants staged demonstrations in front of Tamilnadu Bhawan and Kerala Bhawan, Jantar Mantar. In solidarity with people fighting against the Koodankulam Nuclear Power Plant, Tamilnadu movement groups joined the Jawaharlal Nehru University student's Union demonstration in front of the Tamilnadu Bhavan condemning the States repression of the non-violent struggle by fisherfolk and local communities in Idinthakarai.
Later in the day, thousands of nature based communities struggling against water acquisition and privatisation, demanded ‘Save Water, Save Life, Save People' at Jantar Mantar. The groups included Plachimada anti-Coke struggle, Nadi Ghati Morcha, Arunachal anti-mega dam struggle groups, Matu Jan Sanghatan, Kisan Sangharsh Samiti, Narmada Bachao Andolan and others and was led by Medha Patkar, Sanddep Pandey, Vilayodi Venugopal and others.
Thousands of adivasis and marginal farmers from Chhindwara, Madhya Pradesh who came for Jan sansad have been demonstrating against Adani thermal power plant since yesterday at jantar mantar.
They were joined today by nearly 500 people from Bihar and Uttar Pradesh. Kisan Sangharsh Samiti leading the struggle against destructive thermal power plants in the area have been demanding that the illegal clearance granted to Adani Thermal and Pench water diversion project be revoked. Jan sansad passed a resolution in their support and demanded that Ministry of Environment and Forest must take action against Adani & the police atrocities in the region.
Jan Sansad passed resolutions on the issues of communities' control of natural resources, corporate corruption and many other issues. Tomorrow, March 23rd, on occasion of martyrs day, thousands of people joining the concluding session of Jantar Mantar will march from Shaheed Park, near ITO to the Sansad Marg and hand over the resolutions to the representatives of the different political parties. Bhaktha Charan Das, Mohan Singh, Sharad Yadav, Tarun Mandal and many others are expected to attend. The resolutions will also be handed over to the members of civil society, trade unions, University and others. The rally will be attended by Arvind kejariwal, Swami Agnivesh, K B Saxena, B D Sharma, Justice Rajinder Sachar, Ashok Chowdhary, Medha Patkar, sandeep pandey and others. Anna Hazare is also likely to attend the demonstration tomorrow at the Sansad Marg.
Lok Shakti Abhiyan, National Alliance of Peoples' Movement
For more details contact Media Team: Madhuresh Kumar: 9818905316
NATIONAL ALLIANCE OF PEOPLE'S MOVEMENTS
National Office : A Wing First Floor, Haji Habib Building, Naigaon Cross Road Dadar (E), Mumbai - 400 014.
Phone - 022 2415 0529
Web : www.napm-india.org
Anil Agarwal mines daughter Priya's skills for Vedanta Resources
Economic Times of India
22 March 2012
MUMBAI: From destructive mining major to compassionate corporate - when Anil Agarwal, executive chairman of the $11.4-billion Vedanta Resources, had to pick an image doctor to engineer such a change in popular perception, he chose his 22-year-old daughter Priya.
The young Agarwal's first real assignment - a national advertising campaign 'Creating Happiness' in which she has spent Rs 20 crore so far - is already mired in controversy. Vedanta has often been accused of questionable practices, in precisely the kind of tribal areas where this campaign claims it is "creating happiness." But she is unperturbed. "Everyone is involved in controversy but the good work has to continue. We don't bother with controversies," says Priya.
The national campaign airing across 37 channels seems timed with the Cairn acquisition, the Supreme Court appeal next month in the Niyamgiri mining case and lobbying with the government, according to Ashish Bhasin, chairman-India and CEO-South-East Asia, Aegis Media, a media communications firm. "It seems they are attempting to build long-term goodwill and a positive image with the government or certain groups," says Bhasin.
In August 2010, the environment ministry rejected clearances granted to a joint venture led by the Vedanta Group for mining bauxite from Niyamgiri hills.
The final hearing on the group's appeal against this is coming up on April 9. Vedanta's environmental and human rights record has been criticised by investors such as Church of England, Joseph Rowntree Charitable Trust, the Marlborough Ethical Fund and Millfield House Foundation, human rights and activist groups like Amnesty International, Survival International, and by the British and Norwegian governments.
Naive or not, Priya has set out on what Vedanta's many critics would say is a mission impossible - remake Vedanta's brand.
Tough Task at Hand
The exercise is aimed at branding the group as the mining concern, but as a missionary organisation with a social conscience. "It's always been on our minds and my father always wanted to do this," she says. Priya also joined the board of Cairn India as a director three months ago.
Her father doesn't read too much into her two new assignments. "Right now she is learning and executing. I am sure she would need some more time to choose her field," he told ET in an email response. "I am just testing the waters and spending two months each in the marketing, human resources and public relations departments of the company, though my interest lies in PR," adds Priya. But have no doubts, she is the one spearheading the group's image makeover.
Piyush Pandey, executive chairman and creative director, Ogilvy & Mather, India and South Asia, knows Priya as a former employee and a current client. "I didn't work directly with her but I have heard from the team that she is hardworking," he says. "It is too early to put the burden of being a successor to Anil Agarwal at such an early stage in her career," he adds. Pandey, who interacted with her as a client, says she has the potential to grow into the family business if she works towards it.
O&M helped Vedanta fashion the entire campaign. Vedanta has instituted 3,000 'anganwadis' or community centres, providing childcare programmes among mothers in these poorer communities around their sites and plan to scale it up.
With Rs 20 crore already spent on television, Agarwal is planning more. Her next phase is a carefully-crafted image-building campaign to include print and social media sites like Twitter and Facebook. Her brother Agnivesh Agarwal, 32, is also a part of the business and is heading
Rio Tinto is gearing up to develop India's second diamond mine in Bundelkhand
Economic Times of India
18 March 2012
You could mistake the porous piece of rock jutting out from a rivulet in the teak forests of Chhatarpur, Madhya Pradesh, for just that - a piece of rock. But that could be a million-dollar omission. Last month, 35 top geologists from across the world were queuing up to be snapped against it.
The outcrop, as they call it in geological terminology, could potentially mean the Next Big Thing in diamond mining. Moneybags from Australian mining behemoth Rio Tinto are rolling up their sleeves, praying that somewhere scattered among the dirt and rock in the 954-sq km area could be the next Koh-i-Noor. All this in the heart of Bundelkhand, where banditry is considered an acceptable option for survival.
Well, Diamonds are Forever...
...Maybe, but the diamond mines are not. What Rio Tinto hopes to develop will only be India's second diamond mine, and the first ever by a private company. The outcrop was spotted by company geologists in 2004, and is considered the most significant diamond discovery globally in over a decade.
The Anglo-Australian miner has finally received a Letter of Intent - a commitment from the state government that once clearances come through from the ministry of environment and forest (MoEF), the diamonds are its to mine. On an average its takes 8-10 years to develop the deposit into an operational mine; at pre-feasibility stage now, the actual mine is a few years away.
The Bunder Project, a codename inspired by the monkeys of the area, will be among the four new diamond mines likely to become functional globally in the next 10 years.
Rio Tinto has been prospecting the area for over two decades now. Data indicates a field of eight kimberlitic (read, often diamond-bearing) rock pipes named Saptarishi with a promise of 27.4 million carats of diamonds.
The path the Earth's magma takes when it gushes out through cracks in continental shelves over millions of years forms these pipes. When they disintegrate, diamonds often wash down into the land around, and down into riverbeds. One of the world's greatest, the Koh-i-noor, now adorning the British crown, is thought to have been washed down thus into the Krishna river in Andhra Pradesh several centuries ago.
As a primary source of the precious gems, the discovery of a diamondiferous kimberlitic deposit generates much excitement in the industry. One in 100 kimberlites is diamondiferous, and one in 10 among these would be economically viable.
The Living Daylights
The campsite is abuzz. Geological experts from Rio's Salt Lake City and London offices work alongside its Indian team scanning through endless rows of trays of drilled cores, poring over data.
Yet, everything depends on a feasibility study currently underway which requires analysis across technical, economic, social and environmental issues associated with the potential mine. A pre-feasibility study of the Bunder Project is expected to be over by December this year.
However, the firm's prospecting licence (PL) for an area of 25 sq km expired last September. And for nearly a year of the three years it was valid, the company didn't have forest clearance. "The futility of holding a PL without forest clearance has somewhat compromised how Rio goes about studying its deposits," says Nik Senapati, Rio Tinto, India managing director.
But with its mining lease (applied in June 2008) nearly in hand, Rio has zeroed in on Atri, the largest of the eight kimberlitic pipes, with a potential second pipe on its 954 hectare lease area. Of the three diamond mines that Rio has stake in, Bunder, if developed, will be closest to its flagship Canadian diamond project. Rio claims that the deposit is seven times richer than India's only operating mine about 140 km away at Majhgawan, Panna district.
"A new mine is what the country needs. India could become a major producer if currently known deposits are evaluated," says Roger H Mitchell, a geologist and an authority on diamond-bearing rocks.
Licence to Mine
Legend has it that the 18th century saint Prannath asked King Chhatrasal to ride out one morning and told him wherever his horse trod there would be diamonds. The distribution of diamonds around Panna - in Ramkheria, in the gravel land at Hatupur, Bargadi, Kalan and Kitha, and further down along the banks of the Baghin river in Satna district, and now in Bundar - lends itself perfectly to the story of the king.
"The romance of diamonds is such that empires can be built and destroyed around them," says C Krishna, a geologist at the Bunder project. It was Krishna's wife Leena, who first spotted the outcrop in 2004. Rio is building up such a dream for the Buxwaha region of Bundelkhand.
But in 21st century India, dreams have a history of getting mired in red tape.
India's other diamond mine, the NMDC-run Majhgawan in Panna, would testify for that. In 2006, the Supreme Court ruled that the mine, falling within the limits of Gangau sanctuary, could be allowed to operate - closely monitored - only up to 2010. Falling in line, the mine implemented 21 terms and conditions for a five-year renewal of permission to continue using one-time forest land on which sits its processing plant, offices and residential colony. The mine area is patta land; the to-do list included completing settlement right on land occupied almost 50 years ago.
Majhgawan, which will clock a net loss of Rs 28 crore in 2011-12, is currently operating at a fourth of its capacity. General manager CE Kindo is busy recruiting staff to replace retirees but the appointments would have to wait till MoEF gives the green signal. In its 56 years of existence, the mine has produced one million carats. In 30 years Rio' Argyle mine in Australia has produced over 670 million carats of rough diamonds.
Quantum of Solace
And then there are the day-trippers.
Khanak Singh, 56, rushes to the Bhagini river bed when he is not tending to his crops.
Everyday, for at least three hours, he washes the gravel in a basket, dries it out on a patch of cleared land, and then sifts through for a glint that could mean a gem. "It's particularly tedious if you have started a day with hope in your heart. At the end of the day my body feels like it has taken a thousand chappal beatings," he says
And he would rather take those beatings on than miss out on a shining lump.
The government continues to lease out patches of 25x25-foot plots where the entrepreneurial among the villagers try their luck.
Ram Gopal, with his three partners, does it on an organised scale. Hidden from plain view and groaning away in a 10-meter pit is a mechanised digger, hired at a daily rental of Rs 1, 400, while 30 hands basically do what Khanak Singh does by himself: dig, wash, sort, pray and find.
Finds are to be turned in to the government. But rather than wait for the half yearly (now quarterly) auctions, villagers are happier exchanging them for immediate cash with merchants from Surat.
The World is Not Enough
For a globe-trotting geologist - and Team Rio is studded with them - the journey to Bunder is strewn with exotic cliches. The nearest airport is in the temple town of Khajuraho, a Unesco heritage site known for its 15th century erotic sculptures. The road cuts through teak forests infested with dacoits and rhesus macaque monkeys. And leaving behind the Panna Tiger reserve, the road turns towards the mine beyond Chhatarpur.
Once it gets cranking, the mine will employ around 400 people and will have a life of 20 years. The company says it has initiated a slew of corporate social responsibility measures to endear the locals and help the community spread over 15 villages.
And for good reasons - ranging from the mundane to the sacred. When the first of the Rio SUVs rolled into Bundelkhand, locals mistook the black seat-belts to be gun holsters - seat belts are all grey now. Rio will also have to address concerns of water wastage in this parched land infamous for recurring droughts. It is already helping set up solar-based pumps to get water to villages
For the time being, there are only happy faces to be seen - in sharp contrast to other pits where mining and private sector come hyphenated.
Thirty-five-year-old Soniabai tells ET on Sunday that thanks to her job at the Rio kitchen, she managed to get her children married. With an assured monthly take home of Rs 4,000, she now plans to fund her nephew's marriage and pay off her Rs 50,000 debt.
Snug in her big black boots - a must for all the staff - Soniabai , Rio's first woman employee, walks back home at the end of the day, safe in the company assurance that her Bundelkhand will soon find itself on the world map.
Up until now, the only well-dressed folks who cared for this arid area were ambitious politicians looking for that perfect photo-op with the evidently a-lot-less-privileged.
But if Rio has its way, and find, all that could change. In 10 years, Bundelkhand could be among the top ten diamond destinations of the world.
No corporate impropriety by Sesa Goa, says new SFIO report
5 March 2012
In a U-turn, the fraud probe agency SFIO in its latest report said that mining major Sesa Goa Ltd (SGL) has not indulged in any corporate impropriety with regard to allegations of over and under invoicing of exports and imports.
"Percentage of commission and rates of invoicing in import of coking coal and export of iron ore for sale of iron ore by SGL were nearly at the same levels according to the prevailing market trend during the period from 2001-02 up to 2006-07," said the second report of the Serious Fraud Investigation Office (SFIO).
In its earlier report last year, the SFIO had found various irregularities and had recommended that prosecution be filed on nine counts against the SGL and its management.
The charges against SGL included excess payment of commission to sale agents, over-invoicing of import of coking coal and under-invoicing of iron ore exports amounting to about Rs. 1,000 crore.
Following repeated representations from the company, the SFIO conducted second probe and concluded that had the SGL provided the explanations earlier, the conclusion would have been in their favour of the company.
"Had the management of SGL given explanation in their statements recorded by the SFIO during the investigation which is given now in representation, then the conclusion of SFIO, would have been different and in favour of SGL", said the report which was submitted to the Corporate Affairs Ministry on February 28.
The Ministry, which had earlier order prosecution proceedings against the SGL, will now have to take a call in view of fresh findings of the SFIO.