Dense Forests Foster Illegal Trade

A top ministry official said states considered illegal mining and pilferage as employment opportunities. The chief minister of a mineral-rich state told the coal minister that ‘illegal mining was a small-scale industry in the state’.

Coal mines are located in dense forest areas, giving an advantage to illegal traders. The official said trading took place despite tough measures taken by the government. Extraction of coal, its quantity, grade and usage are verified every year by the Coal Controller’s Office, state mining department and other government agencies from time to time. A truck carrying coal cannot move without permits of district and state authorities called 'delivery orders.'

An inter-ministerial panel said Prakash Industries overstated capacity of its sponge iron unit at Champa in Chhattisgarh to secure coal blocks. The panel report said coal production from Chotia mine allotted to the company was higher than the required amount of coal as per government norms. The Chotia block of Prakash Industries is the only operational mine in the Hasdeo Arand coal belt. The coal ministry on October 4 decided that the company would not be allotted the requested Vijay Central and Urtan coal blocks. Prakash has the moved Chhattisgarh High Court against the report.

A ministry official said the ministry was waiting for a final report from the Central Bureau of Investigation for further action against the company. The CBI last year filed a case against Prakash Industries for alleged black marketing of coal. The agency had also named a few coal and steel ministry officials in its report. The agency had alleged that the company diverted 2.27 lakh tonnes of coal to the black market between December 2007 and August 2008. Typically, producing a tonne of sponge iron requires 1.6 tonnes of coal. Besides, the central excise department had slapped a Rs 90-crore penalty on the company for excise evasion.

The company’s director corporate affairs, AK Chaturvedi, said corporate rivals were framing the company. “The allegations against us are based on forged documents filed by our rivals. We never said we had a capacity of more than 4 lakh tonnes per annum with two kilns. We would achieve 6 lakh tonnes per annum in next 15-20 days with operationalisation of the third kiln.”

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