KORBA: A vast grey moon-like crater lies where there was once lush green forest. In this corner of north Chhattisgarh's Korba district, seven years ago, a company acquired rights to extract coal as raw material for the expansion of its sponge iron plant. The company emptied out coal from one sq km in Chotia block, but did not expand its plant. So where did the coal go?
As CBI probes allegations that the company, Prakash Industries Ltd, sold in black coal worth hundreds of crores of rupees, TOI has accessed documents that reveal not just a series of violations by the company, but also raise concern over the lack of government scrutiny in the allocation of coal blocks.
In fact, what Prakash Industries has done could well be the modus operandi for a number of other such units that have brazenly violated rules and mined coal which could be worth crores of rupees in the market.
All attempts to contact the company's corporate office in New Delhi, even emailed queries, did not get a response. What makes Prakash Industries' case significant is that the Chotia block is the only operational mine in Hasdeo Arand, a dense forest recently classified by the ministry of environment and forest as a 'no go' area, putting it out of bounds for mining, triggering an inter-ministerial war in New Delhi.
Long before the current clampdown, Prakash Industries was the first company to acquire a mining lease in the forest. In 2003, it was allocated Chotia block to extract coal exclusively for use in its proposed 8 lakh tonne sponge iron plant in the neighbouring district of Janjgir Champa. The company's plant, which then had a capacity of 4 lakh tonnes, was to be doubled by 2004.
But, over the next five years, the capacity stayed stagnant. As per the records at the district industry office, the company added 2 lakh tonnes as late as December 2009, still short of the required 8 lakh tonnes. While it failed to expand capacity, the company rapidly accelerated coal extraction.
The approved mining plan mandated the company to extract 10 lakh tonnes of coal per annum, starting with 5.5 lakh in the first year, gradually scaling it up, to reach the 10-lakh mark in 20 years. But the company's own despatch statements show it exceeded approved targets, mining nine lakh tonnes in the second year, violating the plan.
As the company over-extracted coal and under-produced sponge iron, a lucrative market opened up. On average, 1.2 tonnes of grade D coal is needed to produce one tonne of sponge iron. A four lakh tonne plant is likely to use 4.8 lakh tonnes of coal a year. Minus this from the nine lakh tonnes of coal the company mined every year, and it leaves at least 12-15 lakh tonnes of coal that went unused till 2009. The price of one tonne of coal is Rs 1,500. A back-of-the-envelope calculation shows this unused coal was worth at least Rs 200 crore, a conservative estimate, based on the production figures declared by the company.
Where did the unused coal go? It's evident the company sold it in black," said Mohammad Akbar, opposition MLA, who raised the case during the last assembly session, questioning why the state government was supporting the company's bid for more coal blocks.
Since last year, the circle of investigations against the company has expanded, drawing in diverse agencies including the CBI, the state excise and even the ministry of steel. But this has not impeded the acquisition of more coal blocks by the company, one in MP, three in Chhattisgarh.
Recently, in a letter to Chhattisgarh CM Raman Singh, environment minister Jairam Ramesh called Hasdeo Arand "an unfragmented forest of great biodiversity, one of its only kind left in the country".
In May, Union environment ministry marked Hasdeo Arand as a 'no go' area, to protect it from being shaved off for coal mining. This upset not just Chhattisgarh government, but three Union ministries of coal, steel and power sought the PM's intervention to reverse MoEF's embargo. Their argument: companies need urgent access to coal to produce power and steel.
While industry's need for coal can't be disputed, the case of Chotia illustrates that giving a company access to mines is no guarantee of production, especially in absence of government scrutiny. This, perhaps, should introduce caution in the rush to allot coal blocks in prime forest areas.
Source: Times Of India, 8-9-2010
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