Irregularities in mining and extraction sector: CAG

Excess extraction of minerals, excavation of bauxite outside the lease area, transferring lease rights without approval of the government and extraction of minerals without lawful authority and shortfall in royalty collections — after states like Goa and Karnataka saw controversies over illegal mining, lease violations and environment degradation, some irregularities in the mining and extraction sector in Maharashtra have come to light.

In its report tabled in the state legislative assembly on Wednesday, the CAG has pointed to poor controls on the mining sector in Maharashtra.

Minerals are classified as major minerals (coal, bauxite, limestone, iron ore etc) and minor minerals (like sand, stone, murum, ordinary earth). Minor minerals are governed by the government, whereas the Centre frames rules and policies for major minerals.

In Maharashtra, revenue receipts like rent, royalties, penalties, fines and fees from mines and minerals are the highest non-tax revenue after interest receipts. Coal, limestone and bauxite are the highest contributor of revenue among major minerals.

The CAG's audit noted that in five cases, the lessees had extracted minerals (limestone and bauxite) either in excess of mining plan or without the approval of mining lease. "Thus, the lessees had extracted 4.03 lakh MT mineral valued at Rs6.23 crore.... This escaped the notice of the Department as well as the IBM (Indian Bureau of Mines) with the result timely action to prevent excess production could not be taken," the report said.

The mining plan is a prerequisite for a mining operations and indicates details like the name of mine, owner and norms to be followed during extraction.

The CAG found there was no coordination between the Directorate of Geology and Mining (DGM), MoEF and IBM to fix the extraction ceiling to trace the excess production of the mineral. Moreover, the quantity mentioned in environment clearance (EC) was at variance with the quantity mentioned in the scheme of mining and the quantity actually extracted.

"…the actual production was more by 259.44% of EC and 53.88% less than the scheme of mining. The reasons for variations were neither found on records nor given by Department," it shockingly noted, adding that the state government may take up the matter with the Centre for fixation of a uniform target of extraction of the mineral in the benefit of the revenue and the environment.

In Kolhapur, environment clearances was granted to two lessees by the MOEF in December 2006 for bauxite extraction. In their documents, they had mentioned the distance between the national park and the leasing area as more than 10 Km. However, later MoEF found that the distance between Chandoli National Park boundary and mine lease area was between 800m and 1,600m only and the environment clearances were cancelled on August 2012 and November 2013.

"Though the mining operations were suspended, no action was taken for the mining activities performed/done on false documentations. Bauxite ore of 26.97 lakh MT valued at Rs30.02 crore was extracted during the period of operation. This entire production should have been treated as illegal extraction and the cost of the mineral should have been recovered," the report said.

It also noted to how bauxite had been illegally extracted outside lease areas in two cases at Kolhapur and how six lessees in three districts of Kolhapur, Raigad and Yavatmal, had transferred lease rights without the Government's consent. The department had also not maintained proper records to ensure timely royalty payments.

The audit also suggested that the state may consider reviewing the system of auction of sand ghats in a manner that auction of maximum number of ghats was possible. A system for ascertaining the actual quantity of sand extracted after allotment of sand ghats was also absent.

The CAG said the state government did not have centralized data about quantum of minor mineral (other than sand) and location and as a result the management of the minor mineral could not be effectively monitored.

Districts have no definite mapping of stone quarries, reserves of minor mineral, systematic plan for judicious use of mineral resources and short and non-recovery of royalties and penalties was also observed.