By Bizodisha Bureau, Bhubaneswar, August 2, 2017: In a historic judgement that could pave the way for transparency in mining operations in the country, the Supreme Court on Wednesday imposed a 100% penalty on illegal mining on account of lack of forest and environment clearances, mining outside lease/permitted area and for mining in excess of what has been allowed.

A two-judge bench of Justice Madan B Lokur and Justice Deepak Gupta has directed the state government to recover compensation from the mining companies payable “from 2000-2001 onwards at 100 per cent of the price of the mineral”, and should be deposited on or before December 31, 2017.

The Apex Court will separately hear cases of illegal mining by Jindal Steel and Power Ltd., Rungta Mines Ltd., Sarda Mines Pvt. Ltd. and Essel Ltd, for resumption of mining.

The issue of illegal iron and manganese ore mining in Odisha before the SC is primarily from three districts, Kendujhar, Sundargarh and Mayurbhanj. Incidentally, the first two are also among the top two iron ore mining districts of India.

A report by the SC appointed a Central Empowered Committee (CEC) to look into illegal activities by mining companies, in April 2014 had observed that at that time, out of the 187 mine leases granted in the three concerned districts in Odisha, 102 leases were in violation of various statutory clearances and permits. These included violations of required environmental clearance (EC), forest clearance (FC), consents from state pollution control boards (SPCBs), operating beyond permissible limits etc.

Observing such violations, by its interim order of May 2014, the SC had restrained operation in the 102 mining leases. Restraints were also put on additional 29 leases, whose lease applications were rejected or had lapsed. Among the remaining 56 operational mines, the SC had put a further suspension order in 26 mines, saying they have not received the required renewals under the mining law.

However, these 26 leases were later allowed to operate in 2016, after the amendment to the MMDR Act in 2015. After the amendment, the renewal clause for mine leases was removed and a flat leasing period of 50 years was given (except coal, lignite and atomic minerals).

The SC’s order for compensation on the companies who had resorted to illegal mining, has been levied as per provisions of the Mines and Minerals (Development and Regulation) Act, 1957 (as amended in 2015). Section 21(5) of the Act, empowers the state government to recover the price of the illegally-mined ore from each defaulting lessee.

Besides, the government can also recover any rent, royalty or tax, for the period during which such illegal mining activity was being carried out outside the mining lease area.

However, applications by four mining companies, namely Jindal Steel and Power Ltd (JSPL), Rungta Mines Ltd, Sarda Mines Pvt. Ltd and Essel Mining and Industries Ltd, for resumption of mining will be heard separately by the court.

The SC also directed the state government that the compensation amount recovered should to be used for “benefit of tribals in the affected districts”. These districts such as Kendujhar and Sundergarh are also currently receiving huge amounts of money by the way of district mineral foundations (DMFs) for benefitting people in mining affected areas.

Finally, the SC has directed the Centre to revise the National Mineral Policy by December 2017, as it is outdated to deal with present day challenges. Speaking of the ineffectiveness of it, the bench said that the policy “seems to be only on paper and is not being enforced perhaps due to the involvement of very powerful vested interests or a failure of nerve.” The court directed that the new policy should be “fresh and more effective, meaningful and implementable”.