Live
- Punjab DGP, MHA official request farmer leader Dallewal to end 20-day fast
- Stage Collapse During Swearing-In Ceremony of KUDA chairman in Kakinada
- Govt unveils ‘Jalvahak’ to boost inland waterways
- List of criminals: Delhi BJP chief on AAP panel of 38 candidates
- PSBs in India clock record Rs 1.41 lakh crore in net profit in FY24
- Telangana Government Announces Key Development Plans: Bhatti Vikramarka
- Crackdown on illegal poppy farming in Manipur: Assam Rifles destroyed 6,228 acres in 5 years
- South Korea's ruling party leader cancels press conference amid calls for resignation
- AIADMK's big meet discusses 2026 polls, prospective alliances
- BJP questions Congress-Shiv Sena (UBT) alliance over Aaditya Thackeray's Savarkar-Nehru remark
Scrap bauxite MoU: CAG
In what comes as a note of caution for the government of Andhra Pradesh, which is contemplating to take up bauxite mining.
- Says it was meant to loot precious metal from Araku
- APMDC roped in Jindals, Ras Al Khaimah during YSR time
- CAG says the equity that APMDC got was too low
- Sale price of bauxite fixed on royalty method
- Profit limited to just 1.25 times the royalty
- Naidu govt in a fix as it plans to pursue mining in valley
Hyderabad: In what comes as a note of caution for the government of Andhra Pradesh, which is contemplating to take up bauxite mining, the Comptroller and Auditor General (CAG) asked it to scrap the existing MoU signed with Jindal South West Holding Ltd and Ras Al Khaimah, saying it was meant to loot the precious mineral from Araku valley. The MoU was signed during Y S Rajasekhara Reddy's regime between 2005 and 2007.
The CAG, in its report, said the equity the Andhra Pradesh Mineral Development Corporation (APMDC) got from the MoU was too low. It also found fault with the APMDC for sort of undervaluing the cost of the mineral. Sensing the potential danger involved in it, the Union Tribal Welfare Ministry cancelled the mining lease in September 2012. The report said that the government should cancel the old MoU and enter into a fresh MoU keeping in view the market prices of alumina and aluminium.
The audit observed that the value of the bauxite mines that come under MoU was taken at Rs 258 crore as against the real value of Rs 11,400 crore. Even though the figure was indicated by the Principal Secretary at a review meeting in September 2004, the State government entered into the MoU ignoring the suggestions, CAG observed.
Another gross irregularity that was pointed out was that the quantum of the equity given to APMDC which was just 1.5 per cent. The State government entered into Memoranda of Understanding with Jindal and Ras Al Khaimah to set up alumina and aluminium refineries and smelters with APMDC being given an equity stake in these companies.
The APMDC was to mine and supply 240 million tonnes of bauxite to Jindal and 220 million tons to Ras Al Khaimah. Normally in joint ventures, APMDC obtains free-ride equity of 11 per cent in case of other minerals like granite, beach sands etc., However, in this case, APMDC agreed for equity stake of just 1.5 per cent.
Another irregularity is that the sale of price of bauxite was fixed based on royalty method recommended by their own consultant and the profit was limited to 1.25 times royalty charged for bauxite.
In its response to the CAG observation, the APMDC stated that Clause 9 of the MoU gave preferential treatment to the Ras Al Khaimah and also stated that the issue would be renegotiated once the Union Tribal Welfare Ministry revokes its cancellation.
