MB Shah Commission mining report puts focus back on Saranda

BHUBANESWAR: Former environment minister Jayanthi Natarajan approved Electrosteel Casting’s plan to mine iron ore in parts of the Kodolibad Reserve Forest in Saranda, Jharkhand, even though the forest advisory committee had thrice rejected the proposal, according to the findings of the MB Shah commission.
With the Central Bureau of Investigation initiating preliminary enquiries into forest clearances granted to the proposed mines of Jindal Steel and Power Ltd (JSPL) and JSW Steel, the focus is back again on mining interests in Saranda. What’s considered Asia’s finest sal forest and is a key elephant habitat holds 28% of the country’s hematite iron ore resources but is also controlled by left-wing militants belonging to the CPI (Maoist).

The ministry had been asked to reconsider Electrosteel’s proposal by the then principal secretary to the prime minister, said the Shah commission report, which has posted its findings online. Electrosteel was granted the Dirsumburu iron and manganese mine by the mines ministry on June 1, 2006, within just a year and half of applying for it, and without the prior consent of the forest department. It was also successful in setting up a 3mt plant in the state, where others such as ArcelorMittal and JSW are still trying to secure land under memoranda of understanding signed in 2005.

"The commission hasn't asked us for our views," said a senior Electrosteel official who didn't want to be named. “We have complied with the requirements of the Stage I clearance. We need this iron ore mine for our plant. Having come this far, we expect the MoEF (ministry of environment and forests) to grant Stage II clearance."

Natarajan had defended her decision by citing a “strong precedent" set by predecessor Jairam Ramesh in clearing a similarly placed mine of Usha Martin. The Shah commission, established to investigate illegalities in iron ore mining, raised concerns over approvals granted under the Forest Conservations Act, 1980, to JSW, JSPL,Usha Martin and Electrosteel and wants them withdrawn.

In January, Natarajan granted forest clearance for 537 hectares to JSPL’s Jeraldaburu iron ore mines, which are in the core Singhbhum Elephant Reserve, and 999 ha in the Ankua reserve for a proposed mine of JSW. Both JSPL and JSW said they had not heard officially from CBI, and maintain laws were complied with.

While clearing these projects, Natarajan had cited approvals granted to SAIL and to Usha Martin’s relatively smaller Vijay II iron ore mine. The report said the ministry and the Indian Bureau of Mines raised Usha Martin's annual production cap from 0.65mt to 4mt, "when its captive requirement wouldn’t have exceeded a million tonnes annually," primarily so the company could export ore.

SAIL has the most at stake in Saranda but has been struggling to get clearances, and even its leases renewed. When forest clearance was granted to the Kiruburu-Meghahatuburu mines, for example, it was on condition that SAIL consider phasing out mining at the Manoharapur group of mines in Chiria area. The 2,376 hectares that make up the Chiria deposit, accounting for 3% of the entire Saranda area, is critical for SAIL’s future raw material needs. It inherited these prized deposits--fighting off claimants such as ArcelorMittal--when IISCO, a sick company it had acquired two decades earlier, was merged with SAIL in 2006.

While granting approval to SAIL, Ramesh had argued the public sector unit had a “Rs 18,000 crore IPO on the anvil, 50% of whose proceeds would accrue to the government of India".

But when it came to Natarajan’s approvals, he didn’t seem to be too keen. By then minister of rural development, he had launched the Rs 248 crore Saranda Development Plan (SDP) and wrote to then Prime Minister Manmohan Singh saying, “Maoists and their front organizations and sympathizers have already started a propaganda that the SDP is only meant to subserve private mining interests."

Ramesh could not be reached for comment.

On July 6, 2011, while inspecting an area in Latehar, where JSPL was to undertake compensatory afforestation, officials reported being “kidnapped by Maoists from that village and taken to the denser forest and detained for more than seven hours." The commission’s report also gives details from a diary seized by the West Singhbhum police that’s allegedly an account of levies paid to militants by mining firms.

Refusing to back most of these new projects Jharkhand’s principal chief conservator of forests had repeatedly suggested "intensive and not extensive mining". He pointed out that only 10% area of about 27 existing leases had been opened up and the remaining was unutilized.