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CBI Unravels Wrongdoing in Atomic Minerals Mining Licensing

The Delhi High Court that it had taken a policy decision not to auction or re-grant the offshore blocks

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CBI, Atomic Minerals, Mining
The government was unaware that these minerals had strategic and defence value. Pixabay

The Central Bureau of Investigation (CBI) has uncovered large-scale irregularities in the ownership pattern, financial resources and technical ability of five companies granted mining licences for offshore blocks bearing rare and atomic minerals.

The companies, while applying for mining licence in June 2010, had a common director, the Central government has told the Supreme Court.

The Centre has argued that the five companies were registered after the government called private parties for mining licences in June 2010, says a CBI document.

At that time, the government was unaware that these minerals had strategic and defence value.

CBI, Atomic Minerals, Mining
The companies, while applying for mining licence in June 2010, had a common director. Pixabay

The administering authority of these licences did not obtain mandatory clearances from various ministries, especially the Home Ministry, according to the CBI.

The Delhi High Court, in an order dated April 25, directed the Centre to execute the exploration licence of the companies as per the procedure within four weeks from the date of receipt of the order.

The verdict came even after the Centre, in an affidavit dated April 16, told the Delhi High Court that it had taken a policy decision not to auction or re-grant the offshore blocks, bearing atomic minerals, to private parties.

Moving the Supreme Court against the High Court ruling, the Centre accused the companies of not submitting the proper supporting documents on the basis of which the marking was done in the evaluation sheet.

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The companies were charged with not providing any document indicating the sanctioned line of credit from any financial institution or bank.

One of the companies approached a leading financial services company seeking finance to carry out mining.

“This document was accepted as a document in support of the financial capability of the applicant company. Accordingly, a MoU was signed on September 23, 2010, which was received by Indian Bureau of Mines (IBM) in October 2010, after the date of submission of application for grant of licences on September 14, 2010,” said an internal CBI document.

Therefore, the Centre believed that the company had not confirmed the sanctioned credit limit as per the revised guidelines.

CBI, Atomic Minerals, Mining
The Centre has argued that the five companies were registered after the government called private parties for mining licences in June 2010. Pixabay

“The above MoU was valid only till March 31, 2011. Thus, on the date of issue of grant order by IBM on April 5, 2011, the MoU was null and void,” said the document.

According to information from the Ministry of Corporate Affairs (MCA), the authorised share capital of this company and its sister concerns was Rs 25 lakh each whereas the paid up share capital of each of the companies was Rs 1 lakh.

The net worth was negative for each company during fiscal 2016-17. The companies, even as of now, are not financially capable of undertaking any activities or business operations, said the document.

The companies stated that they were sister companies of 12 other companies engaged in different business sectors.

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“The worth of the companies and their directors are more than Rs 300 crore. If the exploration licence is granted to the applicant companies, expenses up to Rs 50 crore can be spent easily and can be further increased up to Rs 100 crore, if required,” says a petition in the Supreme Court.

“However, this is not acceptable since the company has been incorporated as Limited Liability Company and therefore the financial commitments by the sister companies had no relevance in the absence of resolution passed by the Board of Directors of the sister companies,” it added.

Despite the inadequate documents in support of their financial strength, the companies got 25 marks by the screening committee which shortlisted applications for mining licence.

“These private companies failed to produce satisfactory documentation for the requisite technical ability and financial resources to undertake exploration operation”, said an officer familiar with the investigation.

The CBI has charge-sheeted the government officials who in November 2017 signed in haste two licence deeds with one of the companies without following the due process.

The CBI, which has started preliminary enquiry after a gap of six years following a go-ahead from the apex court, favours a full-fledged investigation against everyone linked to the grant of licences. (IANS)

Next Story

Dangers Of Mining Waste In Brazil

"We have the technology and we have the expertise, and the mining industry frankly has fought making those changes,"

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Brazil, Mining
An Indigenous man from the Pataxo Ha-ha-hae tribe looks at Paraopeba river, after a tailings dam owned by Brazilian mining company Vale SA collapsed, in Sao Joaquim de Bicas near Brumadinho, Brazil, Jan. 25, 2019. VOA

As rescuers in Brazil search for survivors of a dam collapse, questions abound about the health and environmental risks of the thick, brown, metal-laden mine waste that flowed over buildings. The accident comes after the United Nations and others warned that dam failures in the mining industry are becoming increasingly catastrophic because the structures are growing larger and more numerous around the globe.

A look at some of the hazards:

What Are Mine Tailings and How Are They Stored?

Mine tailings are large volumes of waste rock and other material left behind after companies dig up mineral-bearing ore and run it through mechanical and chemical processes to remove the most valuable components. The tailings are disposed of in ponds or other “impoundments,” often in a mud-like mixture of water and rock known as slurry.

A single large mine can produce hundreds of thousands of tons of tailings each day that are typically pumped into a massive holding area behind a dam, where the waste can remain for decades. Tailings piles can be dry enough on the surface to allow people to walk on them, but the inside is often wet, with a jelly-like consistency. A breach can release a runny, muddy material.

Mining
This is one of of the gold mines around Cobar. Flickr

In Friday’s disaster in Brumadinho, Brazil, the dam that failed was 282 feet (86 meters) high and held more than 400 million cubic feet (11.7 million cubic meters) of waste material, according to its owner, Brazilian-mining company Vale.

Are the Tailings Toxic?

The composition of tailings varies from mine to mine, with some containing radioactive material, heavy metals and even cyanide, which is used in silver and gold extraction.

Vale representatives have insisted that the slow-moving mud spreading down the Paraopeba River following Friday’s collapse is composed mostly of silica, or sand, and is non-toxic. But environmental groups contend the iron ore mine waste contains high levels of iron oxide that could cause irreversible damage.

A similar disaster in 2015 at a Vale-operated mine in the same region of Brazil killed 19 people and released 78 million cubic feet (60 million cubic meters) of mud that polluted hundreds of miles of rivers and streams. In that case, a U.N. report found that the waste “contained high levels of toxic heavy metals.”

Beyond the chemical dangers, a huge rush of muddy water into a river system can have long-lasting environmental effects, plastering the riverbed with silt that kills fish and vegetation.

Mining
Mine Waste. Flickr

The 2015 accident in Samarco, Brazil, left 250,000 people without drinking water after downstream supply systems were tainted or otherwise disrupted by mud.

Another danger from a tailings dam breach is that the sudden release can overtop a river’s normal channel and deposit contaminants on normally dry land, said Ellen Wohl, a geology professor at Colorado State University.

Those contaminants can later wash back into the river, re-polluting the water, she said. The contaminants can also become airborne if floodwaters deposit them on the riverbank, where they can dry out and blow away, said Marco Kaltofen, who is also a nuclear and chemical engineering researcher at Worcester Polytechnic Institute.

How Often Do the Dams Fail and What Happens When They Do?

These types of dam failures are increasingly devastating because mines operate on a much larger scale than in the past, producing more tailings that require bigger dams.

There are an estimated 18,000 tailings dams worldwide, according to David Chambers with the Center for Science in Public Participation, which consults with government agencies and private groups on mining pollution issues.

A 2017 U.N report identified 40 significant dam failures over the prior decade — including in Canada, China, Brazil and Chile. A compilation of dam failures by Chambers and others tallied 435 people killed over the same time period.

Mining
Acid rock drainage occurs naturally within some environments as part of the rock weathering process but is exacerbated by large-scale earth disturbances characteristic of mining Flickr

“We can’t tell you where a failure is going to occur, but statistically we can tell you they are going to happen,” Chambers said.

What is Being Done to Prevent Tailings Dam Failures?

The dams can be threatened by earthquakes, undiscovered geologic faults and heavy rainstorms, and each of those threats has many unknowns, said Dermot Ross-Brown, a longtime mining consultant and a part-time professor at the Colorado School of Mines.

Mining companies use the best science and consultants they can find, he said. “It’s just that the problem is so big, and they have imperfect knowledge of what the geology is.”‘

Last year’s report from the U.N. recommended that governments and mining companies adopt a “zero-failure” goal for mining impoundments.

In 2016, in the wake of the Samarco spill, the International Council on Mining and Metals said instances of catastrophic mine waste impoundment failures were unacceptable. The organization issued new safety guidelines, and called on companies to use construction methods and operating practices that minimize the chances of accidents.

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But the industry’s critics say such calls for reforms have yielded few changes and more dam failures are inevitable without stepped-up construction practices and inspection regimes. They say more also needs to be done to make sure that people are not living or working just downstream of the dams, where they are at the greatest risk in a failure.

“We have the technology and we have the expertise, and the mining industry frankly has fought making those changes,” said Payal Sampat with the U.S.-based environmental group Earthworks. (VOA)