Firm slapped Rs 53 lakh fine for illegal bauxite storage

The Geology and Mining Department officials from Gandhinagar along with Revenue Department officials caught local geologists napping when it seized 15,900 tonnes of bauxite from the port on Wednesday. In all about 28,000 tonnes was seized initially however about 12,000 tonnes was found to be of rejected or inferior quality mineral.

The promoters of Bhagwati are learnt to have political connections, sources close to the development told Business Standard.

Illegal mining and export of bauxite has become a serious issue and the government has swung into action from the last one year or so. A special task force has been formed to curb the illegal mining activity in the state.

"Last year we found that the illegal miners had gone to the extent of digging up a considerable portion in the Marine National Park in Jamnagar. The mineral value of bauxite in the park was estimated to be Rs 31 crore. We had filed FIRs and subsequent arrests were made in this regard," said sources in Geology and Mining Department.

Illegal exports of bauxite has been going on from the last two years and in 2007-08 fiscal over Rs 1,000 crore worth of the mineral is learnt to have been exported from the ports of Okha, Porbandar and Jodiya, said sources in the department.

For export, the quality of bauxite should be non-plant or low grade and a royalty charge is fixed for the same. From the past one year or so the state government has stopped giving fresh royalties except in one or two cases.

Non-plant grade bauxite, which has less than 50-55% alumina, is for exports, while high-grade bauxite is for captive use.

Of the total bauxite mined in Gujarat 15-20% comprises plant grade and 80-85% is non-plant grade.

"The quantity of bauxite is limited and the state government wants to preserve for its own units," said a bauxite plant owner. Few companies in India have the technology for converting low grade bauxite to alumina. Also the demand is higher in China, Gulf, Ukraine and Japan so bauxite exporters can quote a higher price.

The illegal exporters pay about Rs 300-600 (including transportation cost) per tonne to the miners for dispatching bauxite to the destined port, say sources. The onus is on the mining contractors if they get caught on the way. "Most of the non-plant grade bauxite mined for exports has to be illegal since barring a couple of players no new royalties have been issued in the last one year," government sources said.

Here, the illegal exporters take over and they pass the port authorities under the aid of old or used royalty pass or may even show royalty receipts of other districts like Sabarkantha and Banaskantha or Kapadwanj where bauxite mines are available, industry sources said.

"The port authorities cannot stop someone once they show royalty pass of non-plant grade bauxite," sources added.

From the ports, the bauxite that was exported was in the range of Rs 1000-1500 per tone depending on the quality of the mineral.