Tamil Nadu Cements Corporation (Tancem) failed to obtain Environmental Clearance (EC) for eight out of the nine limestone mines taken on lease from the government. It operated mines illegally for extraction of limestones without a permit and consequently, faced penalty and royalty liabilities to the extent of ₹119.61 crore, says the Comptroller and Auditor General of India (CAG) performance audit on Tamcem for the year ended March 31, 2021.
There was underproduction of raw meal, clinker, and cement by the units of Tancem valued at ₹446.13 crore mainly on the account of controllable factors like want of fine coal and improper maintenance, the CAG said in an audit that was done from April 2016 to March 2021 at Ariyalur and Alangulam units.
On account of the time overrun of more than seven years in establishing the expansion plant at Ariyalur, the company suffered cost overrun of ₹229 crore, the audit said.
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A detailed examination of mining activities carried out by Tancem revealed that it had mined 9.84 million tonnes of limestone from its mines at Kallankurichi up to August 2017 for which the company paid a penalty of ₹43.60 crore.
The audit also observed that despite paying the penalty, the company continued to extract 6.91 lakh tonnes of limestone three times at Kallankurichi without permit, which may attract a similar penalty of ₹28.26 crore calculated at ₹409 per tonne.
As per Section 21 of the Mines and Minerals (Development and Regulation) Act 1957, the penalty for illegal mining has been fixed at ₹5 lakh per hectare besides a term of imprisonment up to five years. Despite the stringent provisions of the Act, Tancem continued illegal mining. The quantity was mined without a value permit from the State Department of Geology and Mines, and the government was deprived of the royalty of ₹7.30 crore (calculated at ₹105.60 per tonne), the audit said.
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The audit recommended the government may take immediate steps to obtain the EC from the Government of India for all the mines. It also recommended that the government may ensure the stoppage of illegal mining and explore the possibilities of other sources of limestone till obtaining the EC and fix the responsibility for not allowing the statutory clearance in obtaining EC, the audit said.