In the course of over two decades, the Chalk Hills of Salem district have been mined extensively and illegally — this is the conclusion of a preliminary report by a special team constituted by the State’s Geology and Mining Department submitted to the Tamil Nadu government on August 19. This large-scale illegal mining has taken place in a few villages in the district of Salem, barely 50 km from the Chief Minister’s hometown of Edappadi.
Magnesite is a mineral found occurring naturally over 17 sq. km. of the Chalk Hills of Salem district. It occurs along with another rare mineral dunite. Magnesite is a carbonate of magnesium and is an important mineral used in the refractories for the steel industry, in fertilisers, pharma and food processing industries. Dunite is another rare mineral occurring largely in Salem, Tamil Nadu. Dunite is used in the iron and steel industry and as a refractory material. It is also used in paints and as an abrasive.
In the past two decades, 67 units meant for grinding of these minerals have come up in the Chalk Hills close to Yercaud. Of these, 40 were inspected by the two-member team comprising T. Muruganandham, Deputy Director of Geology and Mining, Chennai, and K. Kalaivanan, Assistant Geologist, Erode, on August 3. The inspected units did not have the necessary licences and permissions to operate. “On inspection, it is also found that these units are not maintaining any records for storage and sale of minerals,” said the report, adding, “Nearly 10,000 to 15,000 tonnes of dunite and 2,000 to 3,000 tonnes of magnesite per month were consumed in the grinding unit.”
The report states that nine persons have died in the illegal mining pits in the Chalk Hills. Mining methods themselves are dangerous: blasting near high-tension lines, close to inhabited areas and labourers working without any protective gear have all been highlighted in the report.
The exploited land belongs to the Government of Tamil Nadu — it is classified as poromboke land. What should belong to the public has instead gone into the hands of private parties who have, prima facie, looted six areas in the Chalk Hills.
Direction to govt.
The report’s most fascinating case study is that of the inspection of 19.02 hectares of government poromboke land in Survey Number 76/1 situated in the village of Kondamanayackenpatti. This story begins in April 1986 when Tamil Nadu Magnesite (Tanmag), a State government concern under the Geology and Mining Department, headquartered in Salem, was granted a 20-year lease to mine magnesite over 19.02 hectares in the village. The lease to mine expired in August 2006.
Tanmag also got permission to set up a chemical beneficiation plant to manufacture high-quality magnesite products. Tanmag “tied up a term loan sanction” with IDBI in 1988 for the project. However, Tanmag “started to experience difficulty in raising funds to meet its commitments in this project,” according to the report.
Enter a Joint Venture (JV) with Kolkata-based Khaitan Supermag — with a shareholding pattern of 26% with Tanmag, 25% with Khaitan Supermag and the other 49% in the form of shares from the public. The JV was called ‘India Magnesia Product Ltd’. In 1993, Tanmag’s mining lease was transferred to the JV company, India Magnesia Product Ltd.
Still, the Chemical Beneficiation Plant did not come into operation. Khaitan Supermag could not raise the requisite funds and requested the State government to implement the project through another Khaitan group company – Khaitan Hostombe Spinels – which had a higher credit rating and could raise funds through a public issue. The State readily agreed.
But by this time, the cost of the project had shot up from ₹235 crore to ₹305 crore due to delays, and by 1997, it was jointly decided by the government as well as the Khaitan group companies that the project should be closed.
On July 28, 1997, Tanmag’s Board decided to terminate the project as well as the lease transfer to India Magnesia Product Ltd.
The State government then directed Tanmag to “dispose of the equipment imported for Chemical Beneficiation Plant and lying in Chennai Port Trust by selling them at price which could be fetched,” as per the report.
Accordingly, the State government wrote to the Union Ministry of Mines in 1999 asking them to terminate the mining lease granted to India Magnesia Product Ltd. The Union Ministry of Mines, citing various reasons, rejected the request in 2000.
India Magnesia Product Ltd, in effect a non-existent company without a Board or Directors, was allowed to continue mining operations until the expiry of its lease period in 2006.
Strangely, this same non-existent company applied for renewal of its mining lease to the State government in July 2005. The District Collector forwarded this application to the State Geology and Mining Department stating that it “was not recommended”.
In August 2006, the State government rejected the mining lease renewal request “filed by the sole Managing Director of the so- called Tvl. India Magnesia Product Ltd,” as per the report.
The same month, the non-existent India Magnesia Product Ltd moved the Union Ministry of Mines against the State government’s rejection. An interim stay was granted to the firm. Using this stay, the company sent requests to the Industries Secretary of Tamil Nadu in September 2006 requesting that transport permits be issued “as if the company is entitled to mine and transport the minerals,” reveals the report.
The case landed up in the Madras High Court with India Magnesia Product Ltd filing a writ petition, which was subsequently dismissed. In 2010, the Union Ministry of Mines suddenly did a U-turn, directing the State of Tamil Nadu to “consider the renewal application within six months from the receipt of the order.”
The preliminary report notes that “The revisional order passed by the Government of India is not valid in the eye of law; however, no action has been taken by the Department to file any writ petition to set aside the order of the Government of India for reasons best known to them.”
India Magnesia Product Ltd once again went to the Madras High Court in 2011 and the court ordered the State government to dispose of the application for renewal of mining lease within three months of the order.
The District Collector of Salem in October 2011 reiterated that the State Mining Department need not reconsider the decision to reject renewal of the mining lease.
By 2014 though, the non-existent India Magnesia Product Ltd had managed to obtain Environmental Clearance from the State Level Environment Impact Assessment Authority – the condition being that it would be valid only if the firm had a valid mining lease extension order from the government.
The report highlights: “In spite of various omissions, deficiencies, irregularities, violations of the Act and Rules and contrary to the Environmental Clearance conditions, the Secretary to Government, Industries Department… instructed the District Collector to issue transport permit” to India Magnesia Product Ltd on March 11, 2014.
The then Industries Secretary also wrote to the Union Ministry of Mines to grant renewal of mining lease to the firm for a period of 20 years. No response has been received from the Centre on this request to date, according to the report.
In 2011, the then District Collector of Salem had rejected the application for renewal of mining lease to India Magnesia Product Ltd. By 2014 though, the Collector had done a backflip: in March that year, he allowed the firm to mine and transport magnesite and dunite.
The report makes a damning observation: “…it is very clear that the subject property that belongs to the State is illegally held by the Managing Director of the Tvl. India Magnesia Product Ltd which is not in existence legally and carried out mining operation with the connivance of some middleman.”
The other mines
Other mines inspected by the team show that prima facie, large-scale mining of magnesite and dunite has been taking place illegally in the Chalk Hills. In many areas, mining is being carried out without the necessary permits, as in the erstwhile Ramakrishna Mines. Some firms that have permits are mining more than the approved quantity of the minerals.
The report has recommended a thorough probe by a special team to ascertain the loss to the State exchequer, to auction the confiscated minerals found during inspection, to initiate criminal proceedings against those involved in illegal mining and also to launch a probe into and punish the officials of various government departments who have connived with the illegal miners to loot the State exchequer.
Current Salem Collector Rohini Bhajibhakare told The Hindu that the district administration had initiated action upon receipt of the report. “We have constituted a multidisciplinary 12-member committee at the district level which will look into all aspects of the mining or illegal mining,” she said.
“The first meeting of the committee was held last week and responsibilities have been fixed for each member. The first action is to prevent any further mining. Night time and early morning raids are being conducted, vehicles are being seized and the areas are being monitored.”
(Sandhya Ravishankar is an independent journalist based out of Chennai)
