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'Mining: Rs 4 lakh crore has been looted from Odisha'

Last updated on: November 27, 2012 14:26 IST

Srikant Jena'Naveen Patnaik's simplicity makes him look like an innocent fellow. But he is not like that. You can go to Odisha's mining areas and you can understand what is going on,' Union Minister Srikant Jena tells's Sheela Bhatt.

India's mining boom started as the 21st century began. Odisha and Jharkhand were among the state governments that benefited hugely from it.

But it is the mining companies -- not the people -- that have earned massive profits. Charges of large-scale corruption in the mining of natural resources are flying thick and fast.

In Bhubaneshwar, it is said, the 'iron ore mining scam' is the '2G scam' of the Biju Janata Dal government which rules Odisha. According to Union Minister and Congress leader Srikant Kumar Jena, "From 2003-2004 onwards, a handful of mine owners have raked in profits worth over Rs 200,000 crore (Rs 2 trillion)."

Jena wants a proper investigation into the mining of 500 million tonnes of iron ore in Odisha in the last ten years.

In an interview with's Sheela Bhatt, Jena points the finger of suspicion towards Chief Minister Naveen Patnaik for conniving with "unscrupulous mine owners."

Can you tell us something about the allegations of scams related to the mining of iron ore in Odisha?

For the last ten years, the mining scam is taking place in Odisha. In our state, huge varieties of minerals and metals, including iron ore, bauxite, chromite and manganese, are abundantly available.

Odisha's iron ore is of a higher grade and we have 35 percent of India's iron ore reserves.

There are about 200 players operating in Odisha's mining sector. The mining boom started around 2003-2004.

The price of iron ore has gone upto Rs 7,000 per tonne. The royalty base has not increased. It is hardly Rs 30 per tonne.

The cost of mining is hardly Rs 400 per tonne.

It is clear that mine-owners make a windfall profit of Rs 5,000 to Rs 6,000 per tonne. The Indian Bureau of Mines approved the mining plan. The mining operators went on mining beyond the plan approved by the IBM.

Mining have taken place even in areas which were not cleared by the ministry of mining and the ministry of forests and environment.

Why did the state government not intervene?

It is the duty of the state government. They are supposed to supervise. The state government's mining department gives the permits. The ore cannot go outside the mining areas without the department's permission.

The entire responsibility of supervision and monitoring lies with the state government. The IBM is a central government body. The supervision is the responsibility of the state. Obviously, they have connived with the mine operators.

What is the controversy over 'deemed' mining?

Say, a mine owner has the lease for mining for 30 years. If his mining lease period is getting over, he then applies for the renewal of the lease. The state government recommends to the central government the renewal of the lease after checking that all parameters are in order.

In Odisha, in the last ten years, no mining lease was renewed, no recommendation was sent.

Still, out of the 107 iron ore mines in the state, 83 mine operators were misusing the 'deemed to' clause of the mining law.

Under the law, if their renewal application is in the process, they can go on mining during the 'deemed renewal' phase. It was supposed to be for few months or for a year.

But for the last ten years, the state government has not recommended any new miners or renewal of leases, but the operators are brazenly continuing mining under the 'deemed' category with the state government's patronage.

Till the application for renewal is not approved or rejected, they can continue mining. The mining operations are not easy. Thousands of people work at the mines.

So such a clause helped miners where the process of application of renewal didn't force them to stop work. The clause was supposed to be used in exceptional cases when the process of approval was slow.

In Odisha, 'deemed' mining has become a regular affair.

What's your precise charge against the state government?

The kind of iron ore mining taking place in Odisha needs investigation. Not only have miners extracted beyond permissible limits, there has been clandestine mining too.

The loss to the exchequer is more than Rs 4 lakh crore (Rs 4 trillion). The figures have been derived from official government documents. It is an exploitation of people's wealth by private parties.

They are the big fishes of the Indian corporate world. I have written many letters to Naveen Patnaik. He is keeping mum. In New Delhi, the Shah Commission is looking into the mining sector and its operations in India.

Only because of the fear of getting exposed has the Odisha government imposed a Rs 72,000 crore (Rs 720 billion) fine on the mine owners for irregularities. It is a huge fine and indicates the scale of the scam.

Such magnitude of irregularities, confirmed by the government itself, cannot take place overnight. It was the duty of the state government to monitor against such scams.

Once the lease of any mines is granted, the central government's role becomes very limited. It is not an easy thing to withdraw permission.

In a sense, Naveenbabu is younger than you in politics. You could have done something to stop the alleged loot.

I have been writing letters for a long time to Naveen Patnaik. I have held many press conferences to speak out against the loot. I have been writing letters for the last 6,7 years.

I have even written that 'take over' all the mines. We can't allow this to happen. Naveenbabu is not listening. We don't mind giving minerals to needy industries at concessional rates, but these private operators should go.

In Odisha where such rich minerals are available, more than 60 lakh (6 million) families out of 90 lakhs (9 million) live Below the Poverty Line. Imagine, what a waste of people's resources!

Rs 4 lakh crore has been looted from Odisha and the people are suffering from acute malnutrition. What is going on?

Naveen Patnaik is known as Mr Clean. Your charge of his government's connivance with the mine operators will not stick easily.

He has been winning elections for three terms. His simplicity makes him look like an innocent fellow. He dresses very simply. But he is not like that.

You can go to Odisha's mining areas and you can very well understand what is going on under his nose.

A colossal loss to the national exchequer has taken place in Odisha.

In a season dominated by Arvind Kejriwal, there are any number of people coming out with all kinds of allegations.

The proof of my allegations of the Rs 4 lakh crore loss to the people is derived from government files. The Odisha government has imposed a fine of Rs 72,000 crore. It is official. So imagine what must be the real loss.

My allegations have been proved by the imposition of fines on the mines owners. They have done it because of the Shah Commission.

Patnaik is going to be thoroughly exposed. Perhaps, the Shah Commission is going to say the same thing.

To save himself from legal action, he (Naveen Patnaik) is hoodwinking the people by imposing fines on the mines owners.

The state should not have allowed any company to mine minerals beyond their permissible limits. How can they go outside their mine areas?

What is the modus operandi in the mining scam?

If you have the mine, you get profit per tonne; say, Rs 6,000. Your cost of production will never be more than Rs 500. If your trucks are not allowed to move, you will ask, "How much money do you want?" You will say, "I am prepared to give you Rs 500."

That is what is happening in Odisha. The huge profit margin in mining helps miners to bribe. The 40 to 50 major players' balance-sheets shows that they are earning big bucks from mining.

The corruption in mining in Goa and Karnataka pales if compared to the loot that is taking place in Odisha's mining sector.

How many politicians own mines in Odisha?

They are small players. State Congress president Niranjan Patnaik's family owns mines. They have it for the last 20,30 years. Naveen Patnaik's father Biju Patnaik was the biggest mine owner, but the family surrendered their mines long ago. (BJD MP) Jay Panda has chromite and manganese mines.

It is the tragic story of Odisha that people in the villages are quarrelling for a small pencil, they are fighting for getting homes under the Indira Awas Yojana, but they don't know that their minerals worth crores of rupees are being looted.

They are busy quarreling for their BPL (Below Poverty Line) cards! Our people don't know that mountains around them are being sold out for pennies to corporate houses.

What will you do next?

I will go to the masses. I will ensure that Patnaik goes. He has to resign. I will compel him to resign.

If you allege that I have political interest I would say don't mind my political interest, which is in the interest of the people of Odisha.

How will you prove that Naveenbabu is himself involved?

How could these things happen without Patnaik's tacit support?

His direct link has to be there. He is the chief minister of the state for the last ten years. The highest revenue source of Odisha government is coming from mining.

How can Patnaik say that he didn't not know about the loot when 30,000 trucks are plying in the state of Odisha carrying iron ore to the ports?

Is the chief minister blind? If he says, he didn't know illegal mining was being done, then he has no right to remain chief minister.

How will you prove the corruption charge?

The mega scam has happened. He was the CM when it has taken place. Let him go and investigate what is known to the people in Bhubaneshwar that Rs 500 per truck of the iron ore goes to the secretariat.

The circumstantial evidence proves that chief minister is responsible for the crime.

Sheela Bhatt in New Delhi