MAC: Mines and Communities

India: "Humongous, mind boggling" mining corruption exposed

Published by MAC on 2017-07-12
Source: The Hindu

An expert report has found that, out of 15 million metric tonnes (MT) of raw sand, mined between 2000 and 2017 in southern Tamil Nadu, no fewer than 57% has been extracted illegally. This is despite such mining having been banned in September 2013.

Among the high-value sands falling in this category is monazite - a derivative of the nuclear fuel thorium. Says the report:

"The allegations of the possibility of illegal export of [such] radioactive minerals.... is a matter of concern for national and international security... Investigations will require to examine overseas holdings of the various mining companies as also the overseas companies to which exports of atomic minerals have taken place". 

The report's author, V Suresh, singles out companies owned by a Mr. S Vaikundarajan, as  responsible for some of the worst of these unlawful activities, strongly implying active collusion in them  by government officials:

"The inaction of the government officials despite evidence of the numerous illegalities committed by the mining companies in general, and more particularly, M/s VV Minerals and other mining companies controlled by S. Vaikundarajan or being run by close family members, is very obviously the result of considerable influence wielded by [them] and the close nexus with the decision makers in the highest levels of bureaucracy and political executive".

He adds:

“It is humongous, mind boggling. The types of sums involved cannot be imagined. This is bigger than 2G or coal”.

Two decades saw corruption in Centre and State, says report on T.N. beach sand mining

Sandhya Ravishankar

The Hindu

10 July 2017

Submitting his report on the plundering of rare minerals along the southern coast, the amicus curiae has called for a thorough probe into the role played by various officials. In his report, exclusively accessed by The Hindu, he has also advocated initiating criminal proceedings against the guilty

Governments come and go, but some irregularities last forever. And that is the theme of amicus curiae V. Suresh’s comprehensive report on illegal beach sand mining in Tamil Nadu, submitted to the First Bench of the Madras High Court on June 20 during a hearing on a Public Interest Litigation (PIL) petition that was filed in 2015.

The report, which shines a light on large scale illegal mining of beach sand and the minerals mixed with it and their exports, is also about more than two decades of official neglect and/or collusion by various departments of the Centre and the Tamil Nadu government – from the Department of Atomic Energy to the Union Ministry of Mines as well as various departments of the State.

The report takes into account data supplied by each of the government agencies involved in granting permission to mine beach sand and minerals.
Illegality with impunity

Beach sands of the southern coast of Tamil Nadu comprise a mixture of rare minerals such as garnet, ilmenite, rutile, leucoxene, zircon and monazite. Of these, monazite is known as an atomic mineral and can be processed to yield thorium, a nuclear fuel.

As a result of the data analysis from various sources, a set of multiple figures is arrived at in the report. While the exact quantum of illegal mining is yet to be ascertained, the report concludes that there is no doubt that mining and exports of beach minerals have continued with impunity, flouting all laws and procedures that govern the sector.

The report has calculated the total amount of sand permitted to be mined as per the Mining Plans approved by the Indian Bureau of Mines (IBM) and the Atomic Minerals Directorate (AMD). The IBM comes under the Union Ministry of Mines, and the AMD under the Department of Atomic Energy, directly under the purview of the Prime Minister.

The State government’s transport permits too have been examined and collated – without these documents, mining and exports cannot take place. Data available with the Customs Department has been cross-verified to come to a conclusion on the quantum of illegal mining.

As per this calculation, the report finds that out of 1.5 crore metric tonnes (MT) of raw sand mined between 2000 and 2017 in Tirunelveli, Thoothukudi and Kanniyakumari districts, 57% has been mined illegally. “… [T]he calculation of ‘unlawful’ transports includes three situations: (i) transporting quantities in excess of approved quantities; (ii) transporting minerals not approved to be mined or transported for a specific lease; and (c) transporting minerals during years/periods when there was no approved ‘Scheme of Mining’,” explains the report. It notes that “in general, 6 out of 7 Mining Lessees have indulged in unlawful mining and transportation.”

Similarly, the computation of illegally mined minerals like garnet and ilmenite ranges from 61% to almost 70% of the total amount mined during the same period.

The report shows how the Tamil Nadu government’s ban on beach sand mining and exports since September 2013 has only managed to give the miners a free run.

“The total quantum of exports post the ban period amounts to 28% of the total exports made from 2000-2017,” claims the report. This means that out of a total of almost 78 lakh MT of beach sand minerals exported from 2000 to 2017, the ban period of around four years saw exports of almost 22 lakh MT, a little less than one-third of the total exports that took place in 16 years.

The amicus curiae also records the 2013-14 report of the Special Committee headed by Gagandeep Singh Bedi, tasked by then Chief Minister Jayalalithaa to probe the allegations of illegal beach sand mining. The report got stuck in court in July 2015, just before it was to be submitted to the State government. A single judge order of the Madurai Bench of the Madras High Court, in a case filed by aggrieved beach sand mining firms, directed that Mr. Bedi be replaced by a retired judge as Chairman of the Committee, besides a stay on the filing of the report by the senior officer, pending orders on the allegation of ‘bias’ against a particular firm — VV Mineral and its owner S. Vaikundarajan. Mr. Bedi vehemently contested this claim in court. In August 2015, the Madras High Court struck down the single judge order replacing Mr. Bedi as Chairman. The allegations of ‘bias’ are yet to be decided upon and will be heard as part of the PIL currently before the First Bench.

According to the Bedi report, illicit mining has taken place over 575 acres in three districts alone – Tirunelveli, Thoothukudi and Kanniyakumari. The amount of illegal mining arrived at by the team of 175 officers is over 90 lakh MT.

Another set of figures adds to the mix in the report. This is a back calculation of the amount of raw sand needed to have been mined, based on the figures supplied by one firm.

In January this year, the AMD submitted data to the court about the details of monazite stored byVV Mineral. The data on the total raw sand mined, as well as the stored monazite tailings, were provided by the firm to the AMD. The two sets of data and the related computation should ideally tally, but the AMD points out that there is a ‘mismatch’.

According to VV Mineral, the only company out of seven to have provided the data, the firm mined close to 99 lakh MT of raw sand between 2007 and 2016. The amount of monazite present in this raw sand is taken as 0.05%, as per records available with the AMD. Based on this data, the approximate quantity of monazite computed by the AMD comes to 5,876.6 MT.

But on the basis of another set of data — again supplied by VV Mineral — regarding the amount of monazite tailings stored, a different picture emerges. VV Mineral claims to have stored monazite tailings of 80,725.05 MT. Monazite tailings are the remnants of the raw sand from which other minerals such as garnet, ilmenite and rutile are removed. The percentage of monazite in these tailings will be more concentrated.

The AMD computed the approximate quantity of monazite available in the monazite tailings stored by VV Mineral at a concentration of 29%. This works out to 23,461.7 MT – this is the figure which the AMD terms a ‘mismatch’.

The amicus curiae’s report goes one step further with a backward calculation. “An exercise was undertaken to compute the total quantity of raw sand required to produce 23,461 MTs of monazite… approximately 4.69 crore to 4.93 crore MTs of raw sand will be required to produce the 23,461 MTs of monazite or 80,725.06 MTs of monazite-enriched tailings.” But the total quantity of raw sand transported, as per data collected from the district mining departments, totals only 1.51 crore MT. “This huge discrepancy is significant and requires further study,” concludes the report.

Similarly, IBM annual yearbooks and Customs data have revealed discrepancies of over 80,000 MT of garnet, and only one-third of the actual mined raw sand appears to have been accounted for.

Oversight or collusion?

The report also questions whether government officials and departments, over the past two decades, have been allowing such large-scale illegal mining and exports as a result of oversight, or due to active collusion.

The amicus curiae details how, at every step of the complex procedure for obtaining permission to mine beach sand, basic questions have not been asked.

Take for instance the approval of mining plans, a process that involves the IBM in case of garnet and sillimanite, and the AMD in case of all other minerals. The report points to the approvals granted to mining plans that show an abnormally high rate of replenishment of beach sand minerals. The report points to official data and studies conducted by the government, such as the Nagar Committee of 2010 and other available data-backed literature, which clearly show the erroneous nature of the claim of high replenishment of beach sand minerals made by miners.

“Do the specialists – officials of IBM and AMD — not have the responsibility to check mining proposals which claim more than 50% THM (Total Heavy Minerals or beach sand minerals) in the mining areas specified in the proposed Mining Plan or Scheme of Mining, as to how they show higher norms of THM compared to official benchmarked studies? The moot question remains: is this merely a sign of utter inefficiency and non-application of mind on the part of sanctioning officials of IBM and AMD, or are there other reasons influencing these officials to sanction plans as put up by the mining lessees or companies? This is a matter for further investigation by more competent agencies,” says the report.

Besides, the report observed that “…a high-level probe needs to be instituted to examine how such approvals were given and to fix accountability for the same. Considering the high value of the minerals, the probe should also explore possibilities of different types of influences leading to the granting of approvals of mining plans on the part of officials of IBM and AMD. The highest levels of officials in the decision making chain should be personally held liable for decisions found to be of doubtful or questionable nature.”

While the IBM has issued show-cause notices to mining firms over the years with regard to illegal mining over and above the permissible limit, no action was taken to penalise them, the report points out. “The show-cause notices issued by IBM officials clearly reveal that even as far back as in 2006-07, they were fully aware of the brazen and open violation of the laws by the mining companies. As noted before, in some cases, the illegally transported raw sand production was sometimes 14 to 18 times more than the quantity permitted to be transported. Yet, apart from giving token notices, the IBM officials did nothing to strictly enforce the law.”

“Ironically, the IBM officials, in their replies/notices to the mining companies, point out the importance of conservation of minerals, but at the same time, advise the companies to apply for modification of the scheme of mining so as to regularise the excess quantity removed. For reasons best known to them, IBM officials did not seek to enforce the penal provisions of the MMDR [Mines and Minerals (Development and Regulation)] Act even when they knew fully well that the mining companies were continuing to transport quantities of raw sand and minerals in excess of the permitted quantities, and that the production was taking place even when the mining companies had applied for approval of Scheme of Mining.”

Similar is the case with State government officials who have, over the years, allowed these miners to transport quantities of sand and minerals in excess of what the mining plan permits. Transport permits issued by the State government to allow mining and exports have allowed much larger quantities of minerals and sand to be carted away, according to the report.

A series of inspections conducted by State and Central government agencies have resulted in conflicting reports, and those that exonerate the miners are not based on field studies or data collected on ground. Those that nail the illegal mining are, over a period of time, allowed to slip into oblivion with no action taken, says the report.

“It is very clear that either field inspections, if done, were perfunctorily done, or approvals were given without field inspections and proper examination of the Mining Plan details.”

The report also raises the crucial question — “Is the failure of the official agencies to enforce the law, play their officially mandated responsibilities and ensure effective monitoring of the functioning of the mining companies, merely indicative of inefficiency and lethargy, or are there other possibilities that the officials and the agencies have played a collusive role to ensure that the mining companies escape liability for the innumerable illegalities committed by them.”

The amicus curiae points to the blatant violation of the ban on illegal beach sand mining and exports since September 2013. “It is clear that this large-scale and illegal mining of raw sand, processing and transportation for export of processed minerals could not have taken place without the knowledge, involvement and collusion of local officials. It is important that a probe be conducted into the role of different officials in permitting such brazen illegalities to take place, accountability fixed and criminal prosecution initiated, if required, against all levels of officials who permitted these illegalities to take place,” says the report.

As for the probe into why and how the State government permitted the inclusion of monazite in mining leases to a firm, the report calls for a thorough probe into the same. “The allegations of the possibility of illegal export of radioactive minerals such as monazite or concentrated monazite tailings which contains thorium, a mineral which can be used in the nuclear industry, is a matter of concern for national and international security. It has not been possible for this amicus to probe the veracity of these allegations in the light of the complex nature of the issue and the lack of resources and access to information. Investigations will require to examine overseas holdings of the various mining companies as also the overseas companies to which exports of atomic minerals have taken place. Hence, this requires a thorough and detailed probe by competent investigative agencies like the CBI, to probe into national and international dimensions of illegal transportation and export of atomic minerals over the last two decades.”
Monopoly over the coast?

The report also finds that one man and his family have a virtual monopoly over the beach sand mining sector in the State. S. Vaikundarajan, owner of VV Mineral and Transworld Garnet India, along with his brothers and close associates, is stated explicitly in the report to have been responsible for about 68% of the total quantity of illegally mined sand, as stated in the report.

A total of 50 out of 62 operational mining leases belong to these two companies, both owned by Mr. Vaikundarajan. The rest belong to either his brothers or to two other individuals, Ramesh and Thangaraj, both of whom are close to him, according to the report.

“The study clearly reveals that R-22, S. Vaikundarajan, and R-8 VV Minerals have enjoyed considerable influence with the various government agencies, both in the State government and the Centre, and have been able to stall any serious enquiry into their functioning,” says the report.

“The inaction of the government officials despite evidence of the numerous illegalities committed by the mining companies in general, and more particularly, M/s VV Minerals and other mining companies controlled by S. Vaikundarajan or being run by close family members, is very obviously the result of considerable influence wielded by R8 and R22 and the close nexus with the decision makers in the highest levels of bureaucracy and political executive,” it says.

“It is humongous, mind boggling,” said Mr. Suresh, amicus curiae in the PIL during the hearing on June 20. “The types of sums involved cannot be imagined. This is bigger than 2G or coal,” he said.

The next hearing of the PIL is slated for September. In the meantime, a court-appointed multi-disciplinary committee, comprising State and Central government officers, is expected to complete and submit its report on illegal beach sand mining in the interim. Sources in the team told The Hindu that over 2 crore MTs of illegally mined raw sand has been found in the godowns inspected so far.

Whether the State and the Centre will take action of their own accord, or leave it to the courts to decide, will unfold over the next month or so.

(Sandhya Ravishankar is an independent journalist based out of Chennai)

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