Supreme Court verdict backing Odisha on illegal mining could have wider ramifications

KOLKATA (miningweekly.com) – The Odisha provincial government, in eastern India, will recover $3.17-billion in penalties from mine owners for illegal mining and violating environmental laws.

According to a senior official, the provincial government decided to issue notices to all mine owners to pay the penalty for the illegal mining of iron-ore and manganese, following a review meeting on Tuesday.

The government’s notice and clampdown on mining lease holders was backed by a Supreme Court verdict issued on August 2.

A bench of the Supreme Court ruled that mining companies would be liable to pay back 100% of the price of minerals extracted in violation of the law. The court rejected an earlier plea from the Indian government and a court-appointed Central Empowered Committee on illegal mining, which asked that only 30% of the value of minerals should be recovered from the companies.

The value to be recovered from the companies pertained to minerals extracted in violation of mining plans and environmental laws by iron-ore and manganese mines since 2001.

“It should be 100%. If there has been illegal mining, [the] defaulting lessee must bear the consequences of illegality and should not benefit by pocketing 70% of the illegally mines ores. It simply does not stand to reason why the state should be compelled to forgo what it is due from the exploitation of natural resources,” the court said in its ruling. It added that it would not be “a party to the filling of coffers of defaulting lessees in an ill-gotten manner”.

The Supreme Court said that Odisha should take follow-up measures to realise the money from miners by December 31, adding that mining operations could be restarted only after mining lease holders paid the penalty.

While the mining industry claims that it is till scrutinising the court papers on the ruling, several industry officials note that the order pertaining to illegal mining will have wider ramifications across all mining activities in the country, as there have been cases of illegal mining in most mineral-rich provinces since 2001 and many mining lease holders will fall on the wrong side of the law as per the recent ruling of the court.

“The Supreme Court order in the case of Odisha will not only have repercussions for mining across the country but also for coal mines operating without environment clearances and industries operating with clearances obtained under the 1194 Environment Impact Assessment order,” said Federation of Indian Mineral Industries, secretary general RK Sharma in a statement.

Meanwhile, last week the Mines Ministry informed India’s Parliament that, during 2016/17 96 000 cases of illegal mining of major and minor minerals were reported from the mineral-bearing provinces of Maharashtra, Madhya Pradesh and Andhra Pradesh. The number of illegal mining cases reported during 2015/16 was 110 476.