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TN Minerals Ltd in Shambles Due to Massive Loot by Private Companies Aided by Govt

The loss to exchequer due to illegal mining by private entities was reportedly estimated to be more than Rs 1 lakh crore in 2012, which the government continues to deny.
tamil nadu mining

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The Tamil Nadu Minerals (TAMIN) Limited, a state government undertaking, is languishing for survival, thanks to rampant corruption, alleged environmental clearance issues and lobbying by private entities. TAMIN, founded in 1978 to explore the mineral resources to generate revenue for the state exchequer and save the resources from being exploited by private entities, is now staring at a bleak future.

The organisation has been strangled for long by the influential private lobbies in the mining industry. The loss to exchequer due to illegal mining by private entities was reportedly estimated to be more than Rs 1 lakh crore in 2012, which the government continues to deny. The violations have remained unchecked even as the CAG report has identified irregularities in mining in recent months.

Further, the government’s alleged disinterest in ensuring the continuation of mining lease has affected the livelihood of the workers of TAMIN and revenue for the state. Following this, the company has been forced to shut down production for the past five months while the employees and workers have been paid only half their salary since April 2020.


The various plants of TAMIN across the state have been shut down for production since the end of June. This was the second phase of shut down followed by the initial closure due to the COVID-19 pandemic. The lack of demand and non-payment of bills by the buyers have been cited as the reasons for the shut down.

K Vijayan, general secretary of the TAMIN Employees Union (TAMINEU) told  NewsClick, “The employees, around 700, including the workers and administrative staff, are being paid only half of their salary since April. The ineffective handling of affairs has let down the employees and the organisation. This is another classic example of destruction of a public sector organisation for the benefit of private companies.”

Apart from the wage cut, the employees have been denied safety equipment, uniforms, allowances and earned leave for the past 18 months. 

The coordination committee of the employees’ unions of TAMIN have held several protests in Chennai and in other districts condemning the termination of production and slashing of wages.

An employee working in the graphite beneficiation plant in Sivagangai said, “The production has been stopped citing drop in sales and non payment by the buyers. The government has taken hardly any steps to develop the organisation and has helped only the private companies to boom. Since April we are receiving something between Rs 5,000 and Rs 10,000, with which it is impossible to survive.”

The continuous corruption in the organisation, including the top officials of TAMIN, public works, mining departments and from the government of Tamil Nadu has led to the destruction of the organisation, the employees allege. The graft allegations resulted in two former collectors of Madurai being raided by the Directorate of Vigilance and Anti Corruption. 

The deafening silence of the two major political parties, All India Anna Dravida Munnetra Kazhagam (AIADMK) and Dravida Munnetra Kazhagam (DMK) has only added to the confirmation about their role in the illegal mining scam. 


Though corruption in the organisation and illegal mining by private companies was rampant in the state, the huge exposure came only in 2012, when the then collector of Madurai, U Sagayam reported a loss of about Rs 16,000 crore to the exchequer due to illegal mining in the district.

After being appointed as the Chairman of the one man commission set up by the Madras High Court, the officer estimated the loss across the state at Rs 1.11 lakh crore.  Though the government disputed the claim in 2017 in the court, no exact figure on the loss incurred was quoted. 

The change in policy in 1992 by the then AIADMK government led by J Jayalaitha opened the doors for the private entities. Till then, TAMIN was the only player in the mining industry. 

Secretary Vijayan said, “The new policy allowed private companies to mine from leased lands. Subsequently, the private companies were permitted to extract granites from patta lands, while TAMIN was permitted to quarry from poramboke land (land owned by government).”

The restriction on granite mining in many of the western countries in the late 1990s also played in favour of the private entities, including PRP granites, the most controversial group based in Madurai.


With granite attracting more buyers from around the world, the demand for leases also increased. Apart from mining over and above the permitted limit, the private players looted the resources from the poramboke lands as well with the complete knowledge of the local officials, alleged the employees.

The government introduced two options for the private firms: to act as Raising Agency (RA) and Raising Cum Sales Agency (RCS). While RA was permitted for carving of granites and handing over to TAMIN, RCS agencies were permitted excavation and sale of granites by the private concern itself on payment of a fixed price.

Technically, the government of Tamil Nadu leased the lands to TAMIN making the organisation responsible for preparing the plans for mining and estimating the availability. The availability of granite was also hugely underestimated. The officials from the department of mines, police and revenue departments were reportedly hand-in-glove with the private players in exploiting the resources.

“The TAMIN cited lack of manpower and technology as the reason for sub-leasing of land and introduced RA and RCS schemes. This literally handed over the natural resources to the private concerns to exploitation and encouraged corruption,” added Vijayan.

The prices of the granite blocks were reportedly fixed much lower than the market price by TAMIN authorities. This helped the private entities to earn huge profits, resulting in loss of several thousands of crores to the exchequer.

Though the leases were to be sanctioned based on government’s granite conservation policy – the Mines and Minerals (Development and Regulation) Act 1959, the Tamil Nadu Minor Mineral Concession Rules, 1959, and the Granite (Conservation and Development) Rules, 1999 – the corruption in the industry remains highly normalised.

A recent report submitted by the CAG, tabled in the state Assembly was highly critical of the irregularities in mining in selected districts, resulting in loss for the government to the tune of Rs 550 crore. 


The judgement of the National Green Tribunal on compulsory environmental clearance for all quarrying works came as a jolt. The inaction of the state government in extending the lease for TAMIN also affected the mining works in different parts of the state. 

The proposal of TAMIN in manufacturing M-sand for construction works was approved only to be handed over to the Public Works Department (PWD). “The project with an investment of Rs 15 crore was underway with Bengaluru being identified as the potential market. But, the work has now been taken from TAMIN and handed over to the PWD. It seems the government is less interested in reviving a potential cash cow, while paying due attention to the environmental issues,” Vijayan added.

The existing facilities on granite, graphite, vermiculite, Indian standard soil, quartz and limestone excavation need a facelift to improve production and sales, said the office bearers of the TAMINEU.

The leader of opposition M K Stalin has also demanded the government to permit TAMIN to explore and market rare minerals to generate revenue, which is also dominated by private entities in southern districts. 

The effective functioning of the organisation could fill the cash strapped state exchequer. The unchecked loot of the private players can also be contained and several thousand opportunities could be created.

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