Financial Daily from THE HINDU group of publications
Wednesday, Sep 22, 2004
Industry & Economy
Mining & Quarrying
Kerala industries dept clarifies GO on mineral sand mining
Thiruvananthapuram , Sept. 21
THE Kerala Industries Department has clarified that the Government Order issued recently on mineral sand mining in Alapuzha district is subject to the final verdict of the High Court.
Besides this, the order dated September 15, 2004, has also specified that mining activities could be taken up in the area only after obtaining the various clearances listed out in the letter from the Centre granting permission for mining, according to a statement from the Industries Department here on Tuesday.
Explaining the background of the Government Order, the statement says that the amended mining policy of the Centre in 1998 had opened up the country's mining sector to private and joint sectors and to the foreign investors. In line with the policy, many private companies had set up mineral-based industries in various states.
In Kerala, the Mineral Directorate under the Atomic Energy Department of the Union Government had found that the area between Kayamkulam estuary and Thottapilly in Alapuzha district contained 17 million tonnes of mineral sand. At the same time, a slew of private sector companies like Tatas, apart from central and State public sector undertakings, had evinced interest in investing in the mining sector of the State.
It was against this backdrop that the State Government announced a mineral sand mining policy and the Cabinet decided on October 8, 2002, to grant mining lease to the joint sector subject to conditions. It was also made it clear then that lease would be granted only for value addition and not just for mining, says the statement.
It was also decided that Government agencies participating in the joint venture should have a minimum of 26 per cent equity in the new company. Consequently, the Kerala State Industrial Development Corporation (KSIDC) invited applications for the lease and five companies responded to the tender.
After scrutinising the applications, the one from Kerala Rare Earths and Minerals Ltd. (KREML), a joint venture company, was forwarded to the State Government for consideration. Incidentally, Indian Rare Earths Ltd (IRE), a central public sector undertaking, and KSIDC have 20 per cent and 26 per cent equity stake, respectively, in KREML.
The mining lease was granted to the company by the Cabinet on April 30, 2003, subject to the approvals from the Centre. Meanwhile, faced with stiff opposition to the proposal, the Government had entrusted a team of experts with the task of studying the environmental impact of the project. The team was of the view that there was no scientific basis for the apprehensions.
Later, V.V. Minerals, a private company from Tamil Nadu, filed an appeal in the High Court questioning the Government's mining policy that restricts leases only to the joint sector as against the Centre's policy. The court subsequently issued an interim order restraining the Government from granting leases without its permission.
The statement from the Industries Department notes that the Centre had, in the meantime, approved the application of KREML and it was brought to the notice of the High Court.
The court, in turn, issued an interim order allowing the Government to take a decision on granting the lease, but barring it from undertaking any mining activities pending the court's final verdict.
The latest Government order, says the statement, had specified that mining should be started only after getting the final verdict of the court as also subject to the conditions, pertaining to the no-objection certificates from agencies such as Atomic Energy Department and Exploration and Research Directorate and clearances from the Union Forest and Environment Ministry, as laid out in the Centre's order.
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