‘Cement, power plants use illegally mined coal’

NGT-appointed panel seeks action against erring companies

SHILLONG: After finding that several cement companies and thermal power plants used illegally mined coal, the chairman of the NGT appointed committee headed by BP Katakey has recommended action against them.
In the 77-page report on various anomalies by the cement plants and power plants, Katakey has sought action from the NGT Principal Bench.
The report was examined by the NGT in New Delhi on Thursday but no order has been delivered yet.
The committee said except for the clinker manufacturing plant of the state-owned Mawmluh Cherra Cement Limited and captive power plants of the Maithan Alloy Limited and the CMJ Breweries Private Limited, there is a huge gap in quantity of coal required to produce clinker or power and the coal reported to be purchased from legal sources during the audit period by all other cement manufacturing plants and thermal power plants in the state.
Other cement plants are Star Cement Limited and its two subsidiaries (Star Cement Meghalaya Limited and Meghalaya Power Limited), Amrit Cement Limited and its captive thermal power plant, Dalmia Cement (Bharat) Limited and its captive thermal power plant, Goldstone Cement Limited and its captive thermal power plant, Green Valley Industries Limited, Hill Cement Company Limited, Jaintia Cement Limited, JUD Cements Limited, Meghalaya Cements Limited and its captive thermal power plant, Virgo Cements Limited and RNB Cements Limited.
Others are thermal power plant of Shyam Century Ferrous Limited and thermal power plant of Shree Sakambari Ferro Alloys Pvt. Ltd.
The report, submitted to the NGT on December 2 last year, said that the Committee is of the view that the entire gap of 39.37 lakh MT between the quantity of the coal required to produce clinker and the electrical power and the coal purchased from legal sources by the plants during the audit period constituting about two-third of the coal requirement of these plants has been met from the illegally mined local coal.
“Demand for a huge quantity of illegally mined coal from these plants has sustained and supported a wide scale illegal rat-hole coal mining in Meghalaya in flagrant violation of a ban imposed by the NGT”, the committee said.
According to the committee, this has caused damage to flora, fauna, rivers, streams, water bodies and the environment and made the ban imposed by the NGT on illegal rat-hole coal mining virtually inoperative.
Royalty, tax evasion
The report said that no royalty, taxes and any other statutory levies have been paid to the state on the illegally mined coal utilised by the plants during the audit period resulting in a huge loss to the state exchequer.
In fact, ban on the illegal rat-hole coal mining in the state came as a boon to the cement manufacturing plants and thermal power plants as it virtually exempted them from the requirement of payment of royalty, taxes and other statutory levies payable on more than two-third of the coal consumed by them, the report said.
The amount of royalty (Rs 675 per MT), contribution to Meghalaya Environment Protection and Restoration (MEPR) fund at the rate of Rs 485 per MT and GST/VAT @ 5% of the sale value of approximately Rs 8,000 per MT amounting to Rs 400 per MT payable on the illegally mined coal utilised by each of the plants.
“The royalty and VAT/GST amounting to Rs 423.194 crore payable on illegally mined coal utilised by the cement manufacturing plants and thermal power plants, if realised and properly utilised, can significantly enhance living standard of the tribal residents, especially those residing in the areas affected by such illegal coal mining, of the state. Similarly, Rs 190.929 crore payable to MEPR fund for the illegally mined coal utilised by the plants, if properly utilised, may greatly help in restoration of flora, fauna, rivers, streams, water bodies and the environment in general damaged by illegal rat-ole coal mining” the report said.
False claim on non-fuel mineral
The committee felt that the claim of the cement manufacturing plants and thermal power plants that about two-third of their coal requirement has been met by a non-fuel mineral (slate) without making any change in the design of these plants is not tenable.
Slate is a fine-grained, foliated metamorphic rock that is created by the alteration of shale or mudstone by low-grade regional metamorphism. It is mainly used for roofing, flooring, and flagging because of its durability and attractive appearance. Slate is mainly a non-fuel mineral.
The panel, based on a detailed analysis, is of the view that it is neither technically feasible nor legally permissible for the plants to replace more than two-third of their coal requirement by a non-fuel mineral such as slate.
The report said that the plants have purchased illegally mined local coal in the name of slate to circumvent the ban imposed by the NGT on illegal rat-hole coal mining and also to evade payment of royalty, GST/VAT and other statutory levies and contribution to MEPR fund on the coal utilised by them.
“Even for the sake of an argument, if it is assumed that the claim of these plants that more than two-third of their coal requirement during the audit period has been met by a non-fuel mineral (slate) without making any change/modification in the design of these plants is true, it would have caused equal, if not more, damage to the flora, fauna, rivers, streams, water bodies and the environment in general as all such slate has admittedly been mined in an unscientific and haphazard manner without any mitigative measures and without obtaining mandatory mining lease, consent to establish, consent to operate, environmental clearance and authorisation/no-objection certificate from the State Pollution Control Board in a flagrant violation of the existing mining, environmental, pollution control and labour safety laws”, the report said.
According to the committee, the transportation and use of a huge quantity of illegally mined coal by these plants could not have escaped notice of regulatory authorities, both in the state and Centre. It could not have escaped notice of the district and police administration. Instead of taking actions to prevent use of illegally mined coal by these plants and to initiate appropriate proceedings under relevant provisions of the Mines and Minerals (Development and Regulation) Act, 1957, Water (Prevention and Control of Pollution) Act, 1974, Air (Prevention and Control of Pollution) Act, 1981 and the Environment (Protection) Act, 1986 against these plants for use of illegally mined local coal, the regulatory authorities have tried to regularise/justify the use of illegally mined coal by accepting royalty on slate claimed to be used by these plants and by supporting the claim of these plants that it is technically and legally feasible to replace two-third of the coal requirement of these plants by a non-fuel mineral such as slate and the slate can be used by these plants as a waste without obtaining any clearance from various agencies.
As per information provided to the Committee by the Mining and Geology department, none of these plants participated in a public auction conducted by the state to sell more than 38,000 MT of seized coal available at locations in close vicinity of majority of the plants.
“The Committee therefore is of the view that a major part of the coal requirement of these plants is still being met from illegally mined local coal”, the report said.

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