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Karnataka: Firms favoured in renewal of mining licences, says BJP

Why Chief Minister renewed licences of only eight of the 108 iron ore mining leases, asks opposition party.

Written by Johnson T A | Bangalore | Updated: March 17, 2015 4:07:41 am
 Karnataka mining, Karnataka government, Narendra Modi government, Mining, Congress government,  Karnataka Congress government,Karnataka mining licences, Siddaramaiah, Vedanta group, Narendra Modi, BJP government, The Chief Minister Siddaramaiah himself holds the mining portfolio.

The BJP has accused the Congress government in Karnataka of favouring some firms in the renewal of eight iron ore mining licences in January. Five of these got in-principle renewals on the same day, January 12, 2015, as the ordinance amending the Mines and Minerals (Development and Regulation) Act — MMDRA — came into effect.

The BJP has questioned why these eight mines were not put on auction despite expiry of their lease, as mandated by the new law.

In January, the Siddaramaiah-led government had accorded full renewal to one expired iron ore mining lease and in principle renewal to seven expired licences. The Chief Minister himself holds the mining portfolio.

The in-principle renewals had been granted under the MMDRA ordinance passed by the Centre in January 2015, which is now before a select committee following opposition in the Rajya Sabha. The sole full renewal had been granted to Sesa Sterlite of the Vedanta group, under the old MMDRA of 1957.

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“Why did the CM renew licences of only eight of the 108 iron ore mining leases?” says K S Eshwarappa, leader of the Opposition in the Legislative Council, charging that the decision could have cost “Rs 1,000 crore” to the state exchequer.

Dismissing the BJP leader’s charges as “wild allegations”, Siddaramaiah has said the eight renewals were granted because the companies concerned had applied for renewal prior to expiry and obtained clearances from the Indian Bureau of Mines.

A senior official in the Department of Mines and Geology which gave in-principle renewal to seven expired mining leases admitted these were issued on the day and after the MMRDA ordinance was issued, but stressed that, while the renewals were not final, there was nothing contrary to the law.

“The in-principle approval only states an intent to renew. All existing mining leases are protected till March 31, 2020, under the new law. However, if the lease is not renewed, this has got no value,” said Basant Poddar, the Managing Director of Mineral Enterprises Limited, which was among the companies whose mining lease was renewed.

Under the ordinance brought by the Narendra Modi government, the maximum period that a mining lease can be held is for 50 years. An existing lease, says the ordinance, “shall be extended and be deemed to have been extended up to a period ending 31st March 2020 with effect from the date of expiry” of the last renewal or “till completion of renewal period, if any, or a period of fifty years from the date of grant of such lease, whichever is later”.

This is not applicable to leases where “renewal has been rejected, or which has been determined, or lapsed”.

One of the leases renewed by Karnataka on January 12, in favour of Ramgad Mineral and Mining Ltd, was incidentally quashed on March 12 by the Supreme Court, which held that the lease granted originally to Dalmia Cements in 1953 had been illegally transferred to it in 2002. This lease had been pending renewal since 2003.

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