mining a loophole

Adv P & H High Court Chandigarh

Of the 341 mines existing in Odisha, only 126 operate on the basis of a valid lease. A paragraph in the 53-year-old Mines and Minerals Development and Regulation Act has proved to be the State's bane and the mining companies' boon: It is allowing illegal operators to plunder Odisha to the tune of Rs 3 lakh crore

Mineral-rich Odisha has become a paradise for illegal mining in the last one decade. To earn big bucks, smugglers are making a beeline for the State with the sole aim of plundering its precious minerals. Legal lacunae make illegal mining easy. A sizeable number of mines in the State have been operating years after their leases have expired. The miners use a legal clause involving extension of their leases as an excuse to continue their activity.

Out of 341 mines existing in Odisha, only 126 operate on a valid lease. Of the 215 mines that existed illegally, the leases of 15 expired more than 20 years ago, those of 17 expired 15 to 20 years ago. The lease period of 38 mines ended 10 to 15 years ago and that of another 65 mines ended 10 years ago. The remaining 80 mines have been operating five years after their leases lapsed. This was brought to light by the interim report of the Supreme Court-appointed Central Empowered Committee.

In November 2009, a 150-page petition filed by Mr Rabi Das, senior journalist and president of Odisha Jana Sammilani, brought the mining scam to the notice of the Supreme Court. In response to the petition, the apex court had entrusted the CEC with the task of investigating the scam. The CEC had asked the State Government to furnish all details related to it. The findings of the interim report are based on the submissions made by the Odisha Government and the petitioner.


The 85-page report has laid bare rampant illegal mining making use of lacunae in the Mines and Minerals (Development and Regulation) Act, 1957. As per the 'deemed extension' clause under Rule 24A(6) of Mineral Concession Rules 1960, if a lease holder applies for the renewal of mining lease within a stipulated period, the lease is automatically 'deemed' to have been extended till the State Government actually deals with the applications.

"A large number of mines are operating in Odisha even after the expiry of the mining lease period. This is being done under the provision of 'deemed extension' of mining leases provided under Rule 24A(6) of Mineral Concession Rules and is happening because the applications filed for the renewal of the mining leases remain undecided for a considerable period of time after the expiry of the mining lease period," the report said, adding: "The deemed extension clause is primarily meant to deal with contingency situations and to ensure that the mining operations do not come to an abrupt end because of administrative delays in deciding renewal applications."

But the rule has been misused to allow the expired leases to exist for years. "This provision is not meant to be availed of indefinitely. Moreover, continuing mining over a long period of time without renewal of the mining lease becomes a potential source for serious illegalities and irregularities," the report observed.

Scores of mine owners have excavated iron ore, chromite, manganese and other minerals much beyond the stipulated limit. "The mining activities also exceeded the production limit as approved under the mining plans," the report said. In Odisha, a good number of mines co-exist with the forest land or reserve forest areas. According to an estimate, as much as 80 per cent of the State's mineral-rich forest land is being exploited. While carrying out illegal mining, the miners shamelessly flout the Forest Conservation Act and environmental norms.

"Mining activities were going on in a large number of mines in Odisha without requisite approvals under the Forest (Conservation) Act, 1980, environmental clearances, and Air and Water Acts," the CEC report said, adding, "There was lack of effective coordination and common understanding between the officials of the Mines Department and the Forest Department resulting in ineffective enforcement of statutory provisions."

The report has suggested a set of recommendations aimed at curbing illegal mining. The CEC has asked the State Government to dispose of the mining lease renewal applications pending for years expeditiously and in a time-bound manner. Deemed extension clauses should only be used in contingency situations and cannot be availed of indefinitely, the CEC said. It also further said that mining in non-forest areas can be allowed only after obtaining environmental and other statutory clearances by the lease-holder. The CEC has decided to charge all illegal miners a one-time fine on a land cost valuation formula. For both renewal of mining lease and mining lease, the lessees would have to pay the net present value of the forests for the entire lease area as per a 2002 Supreme Court directive, the report stated. The fine amount is expected to run into Rs 2,000 crore. But the Odisha mining scam is estimated at Rs 3 lakh crore. The figures tell their own story. The CEC formula does not take into account the millions of tonnes of illegal minerals.

Ever since media coverage of the scam, the BJD Government has been in the dock. Well aware of the large-scale pillage, it turned a blind eye - indeed, let the red-tape allow illegal mining and smuggling, thereby providing covert help to the jholawallah brigade in siphoning off Odisha's minerals. The image of the Naveen Patnaik-led Odisha Government has been dented. The Odisha Government is trying hard to underplay the scam and sweep it under the carpet. It is reluctant to go for a CBI inquiry into the matter. An indifferent Odisha Government, sitting on the renewal of mining lease applications for years now, is saying it is not at fault as the miners are to blame for not submitting documents, forcing authorities to keep the files on hold.

The Green Bench of the Supreme Court has directed the Odisha Government to implement the recommendations of the Central Empowered Committee with immediate effect. It is now up to the Odisha Government to follow the directive.


Advocates & Mediators.

The national resourses like ore, gas, forest, brond band and telecasting  are the resourses where

state can a common policy while handing over to private persons and companies and royalty can be fixed

in comensurate with international prices. Such funds raised are the precious resources can be used for

developement of persons who were replaced in the process of extraction and for common and speedy

infrastructure developement and environment.

At present goverment projects like visakha steel is starving and is sloly shifting to loss catogery

due to non availability of own mines. May be the same position with NMDC, Aluminuium corporation

Ongc etc.Please do not for get them since these are national assests.


there is a provision that application for renewal has to be submitted a year in advance - prior to expiry of lease period.

the lease is deemed renewed until such time the same is rejected by the state govt.

are there any rulings connected to the same.




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