FRENCH CEMENT GIANT LAFARGE CAN’T DO LIMESTONE MINING IN MEGHALAYA: SUPREME COURT

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IN WHAT could spell trouble for the French cement giant Lafarge’s $255 million cement plant in Bangladesh, the Supreme Court in an interim order banned mining of limestone in Meghalaya turning off supply of raw material from its captive plant in India.

   A three judge special bench headed by chief justice KG Balakrishnan ordered for a complete halt of mining in East Khasi Hill District till March 19. “There shall be no mining till March 19”, said court in its order. It further directed for pricing of the piled up material already mined at the prevailing market price.

   The court passed the order taking into account two grounds. First, the allegation of tribal land was being transfered to the French company’s subsidiary and then mortgaged to foreign banks for raising a loan of Rs $153 million. It was pointed out to the court that land under mining in Shella in Meghalaya was sold to Lum Mawshun Mineral Pvt Ltd which was further transferred in 2006 to Lafarge Umiam Mining Pvt Ltd.( (LUMPL). These land has now been mortgaged to Lafarge Surma Cement which is a joint venture of Frech cement giant and Cementos Mentus Spanish Company.

   Senior counsel PS Narasimha on behalf of Shella Action Committee, a forum of villagers, said, the land was now being mortaged to foreign banks — Asian Development Bank, International Finance Corporation, Deustche Investetionaud Ent, European Investment Bank, The Arab Bangladesh Bank and the Standard Chartered Bank, Bangladesh, for a loan of $ 153 million. Second, amicus curiae Harish Salve and ADN Rao informed the court that not only was the eco-fragile area opened up without the mandatory forest clearance, the raw material was being sent to Bangladesh at the cost price depriving India of a huge revenue due from customs and other duties. Additional solicitor general Harin Raval, appearing for MoEF, said that the ministry had clearly issued an order in May 2007 staying the mining operations.

   This was, however, countered by company’s counsel Mukul Rohatgi. He said, necessary environmental clearance was taken by the cement giant in year 2000 and only seven year later it was declared as forest areas, adding, five cement plants have been set up in with over Rs 5,000 crore in India. The court, however, remarked, “It is a very serious issue. Both issue of mortgagee of land to foreign banks and mining in eco-fragile areas have to be answered”.

   It asked the French company to give details of its operation and the manner it started mining in the area posting the case for further hearing on March 19. LUMPL had been mining the lime stone quarry area spread over 100 hectares near Indo-Bangladesh border for supply of raw material to Lafarge Surma Cement Project at Chhatak in Sunamganj, Bangaldesh. Lafarge and Spanish cement producer Cementos Mollins had set up the state-of-art fully integrated cement plant at Chhatak with a captive power plant of 300 MW. In 2001, the Bangladesh High Commissioner and then Indian Foreign Secretary Lalit Mansingh had singed an agreement for uninterrupted supply of raw material to the plant from the mines in Meghalaya.

   After this agreement, Lafarge had claimed to have obtained relevant clearances from Ministry of Environment and Forests, the state government, the autonomous hill council and the chief conservator of forest for limestone quarrying in East Khasi Hills.

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