CAG raps Karnataka for failing to grant mining leases to steel mills

Last Updated: Tue, Jan 01, 2013 19:30 hrs

The Comptroller and Auditor General (CAG) of India has rapped the Karnataka government for its failure to initiate any time-bound action plan to monitor the implementation of the Karnataka Mineral Policy (KMP), 2008.

“Even after a lapse of three years of formation of the committee under the chairmanship of secretary, commerce and industries department, the government of Karnataka has not formulated any time-bound action plan to monitor the implementation of the KMP so that the desired objectives of the policy are achieved in a time-bound manner,” CAG said in its latest report, Controls and Systems for Sustainable Mining in Karnataka.’

The report was tabled in the winter session of the Assembly held at Suvarna Vidhana Soudha in Belgaum last month.

The state government announced its mineral policy in 2008 with the objective to promote transparency in granting mining concessions and maximise value addition to the minerals extracted within the state by encouraging maximum investments in downstream industries. It was aimed to promote indigenous utilisation of iron ore fines and beneficiation of low-grade ores, promote scientific mining and good environmental management and also formulate rules to regulate mineral trade.

According to the CAG report, the state government constituted a state-level coordination-cum-empowered committee under the chairmanship of the chief secretary to speed up allocation of mineral concessions (leases) in respect of raw materials for the steel sector. The functions of the committee included reviewing the implementation of the KMP 2008, building up of a computerised database, streamlining and simplification of grant of mineral concessions and to review action taken by different departments to check illegal mining.

“Though five meetings were held till January 2012, we noticed that action plans were not drawn up for speedy allocation of the mining leases to the steel sector and no efforts for implementation of KMP were found on record,” the CAG report said.

Captive mining leases
The CAG has also pointed out that the state government did not grant any captive mining leases to integrated steel plants despite constituting a high level committee in May 2007 headed by the chief secretary to grant such mining leases.

“The department of mines and geology accepted in September 2012 that no leases were sanctioned to the integrated steel plants after 2007 despite receiving thousands of applications from companies willing to establish steel plants in the state. The government of Karnataka had recommended to the government of India iron ore leases to 11 applications who had established steel plants in the state,” the CAG report said.

The CAG also pointed out that the Karnataka government did not earmark 15 per cent of the annual royalties collected towards the Mineral Development Fund (MDF) for building infrastructure in mining areas. No new railway lines were commissioned, it said.

In its recommendations to the government, the CAG said that the state government might consider putting in place a system for monitoring the implementation of the KMP in a time-bound manner so that desired objectives of the KMP are achieved within a fixed time frame.

“The government may consider creation of a MDF to undertake the task of building infrastructure in mining areas and make efforts to get the railway lines commissioned to augment the transport facilities in mining areas,” the report said.

More from Sify: