₹60,00,00,00,00,00,000

Most of us have been led to believe that the biggest scams of the UPA-era were the CWG scam, the 2G spectrum scam, the National Herald newspaper scam and the AgustaWestland VVIP chopper scam. This is far from the truth.

The Thorium scam, the Bank NPAs, and the gold / gems import scams were much bigger. Let us look at the ₹60,00,000 crores Thorium Scam. Jaideep Prabhu wrote for DNA in April 2014:

“A few years ago, a story appeared in the Indian press that a massive scam involving the illegal mining and covert export of thorium was taking place in Tamil Nadu. Then, two things happened: one, the story died out quickly without anyone investigating it further, and two, many just assumed it was true. Given the opacity of the Indian state, particularly in matters involving nuclear materials, there is a tendency for suspicions to become allegations and allegations to become guilty verdicts. In an era of scams, government denials made little difference to the public discourse. In a scam-studded decade of Congress rule, the public has reached scam fatigue and numbers as stratospheric as ₹60 lakh crores, the amount the thorium scam is supposed to have embezzled, are out of the comprehension of the common man. Yet an alleged scam of such value, not just pecuniary but also strategic, is worth reconsideration.

The beach sands of Tamil Nadu and Kerala are rich in several heavy minerals such as ilmenite, rutile, leucoxene, garnet, sillimanite, zircon and monazite. These minerals are used in several industries from steel and electronics to jewellery and ceramics. Monazite, however, contains thorium, a nuclear fuel of much interest. Discovered in the 1880s, monazite was the primary source of commercial lanthanides. India and Brazil dominated the market until World War II, but with the commercial viability of Bastnäsite – a rare earth mineral with lower thorium content than monazite – in the mid-1960s, interest in monazite waned. The export of Monazite, used to procure nuclear cooperation from foreign states, was also banned by Prime Minister Jawaharlal Nehru in 1962. It was illegal to mine these rare earth heavy minerals until recently; the only entity allowed to do so was government-owned Indian Rare Earths Limited (“IRE”). In October 1998, government of India opened sand mining to private companies, on the basis of two licenses, one to mine the sand and another to handle nuclear materials. A further change in the law in January 2006 removed several of the minerals in the beach sands from the prescribed list and thus reduced the paperwork required to just one license to handle nuclear materials; private companies were now allowed to mine the sands for export of any mineral except monazite. The law retained thorium as a prescribed substance under the Atomic Energy Act and as a result, monazite remained off-limits to private entities.

However, the law also recognised that these minerals were mixed in the sand and therefore stipulated that companies handling the beach sand have to get a licence under the Atomic Energy (Radiation Protection) Rules from the Atomic Energy Regulatory Board (AERB). The company would have to either dispose of the monazite or store it on its premises as per regulations. Indian government denied private companies permission to process the monazite for thorium or to export the mineral: only IREL would be allowed to do that. The thorium scam allegations make four claims: 1) A private company is exporting thorium-rich sand illegally, 2) Between 2002 and 2012, some 2.1 million tonnes of monazite have gone missing, which amounts to approximately 235,000 tonnes of Thorium, 3) The Monazite has not been returned by the private company to the DAE after mining for other minerals, 4) Only a gentleman’s agreement requires the private company to inform the government about how much Monazite that they possess. 

The first claim is based on some circumstantial and anecdotal evidence that certain people were denied access to beaches where the sand mining was taking place and to the warehouses where the monazite was stored. There could be two plausible reasons for this. The first is that private corporations do not let unauthorised people access their facilities, be it the beaches or the warehouses, for reasons of safety and security. In fact, it may well be illegal for companies to do so without appropriate government clearances. A second reason could be that the facilities are under the jurisdiction of the AERB and only their authorisation can give visitors or inspectors access to premises storing nuclear materials. To an outsider, the plethora of government agencies that make up India’s nuclear conclave may be confusing and appear to be the same, but each of them has distinct and clear legal responsibilities. The second accusation springs from a discrepancy between two reports by the Atomic Minerals Directorate for Exploration and Research (“AMDER”) of the Department of Atomic Energy (DAE). In a report read to the Lok Sabha in 2012, the AMDER stated that there were 10.7 tonnes of Monazite on India’s beaches; in a similar report prepared in 2002, AMDER had claimed 12.8 tonnes of the mineral to be present. This would indicate that 2.1 tonnes of Monazite, or approximately 235,000 tonnes of Thorium, had gone missing in the intervening period.

There is much reason for scepticism at these claims. Though India is estimated to have the second largest deposits of thorium after Brazil, the nuclear fuel is not exactly rare elsewhere in the world. Any international concern that wished to buy thorium can do so relatively easily without risk of running afoul of international or domestic laws. In this environment, it is difficult to envisage a situation in which anyone would wish to acquire thorium illegally. Secondly, the amount of thorium that has allegedly been exported – 235,000 tonnes – is quite simply nonsensical. If India had 100% of its present energy output, about 200 GW, supplied entirely by thorium reactors, the amount alleged to have gone missing in the scam could power India at present rates for some 700 years. To give another example, the amount of thorium exported in the scam could power the entire world for 36 years! A final statistic to underscore the absurdity of the allegation is the annual consumption of thorium by the United States – four tonnes. With world consumption around ten tonnes, the amount exported from India illegally represents 23,500 years of global supplies. IRE itself exports barely five tonnes of Monazite per annum. Thorium cannot be used to make nuclear weapons, and so even lacks the value of exotic contraband weaponry. Given the abundance of the mineral, it is also impossible for anyone to try and corner the market on thorium in anticipation of a surge in production of thorium reactors in the coming years. In conjunction with minuscule global thorium use, it is difficult to fathom whence the demand for such vast quantities of monazite comes.

The third allegation that private companies have not returned any of the monazite to the government makes little sense either, for the law clearly stipulates that the mining company may store the monazite on its premises in full compliance of AERB regulations regarding the storage of prescribed substances. As of 2013, five private firms have been licensed to secure Monazite on their premises. The final accusation, that only a gentleman’s agreement exists between the companies and the government in reporting the companies’ monazite holdings, is not entirely out of the realm of impossibility in a country like India, famous for its bureaucratic lapses and inefficiency. However, the high priority given to the country’s nuclear assets makes this unlikely and any lapse is a result of a lackadaisical bureaucracy at most. It is astonishing that an allegation based on such flimsy, uncorroborated evidence and numbers that bore no resemblance to reality, received even the iota of attention that it did. Perhaps the political environment created a favourable disposition towards believing any ill of the government and reversed the country’s default position to an assumption of guilt rather than of innocence.

There remains, of course, the question about the missing 2.1 million tonnes of Monazite. Is it in fact missing? Are the DAE’s figures accurate? If it has not been exported and is not missing, do the records show that amount in the holdings of the mining companies? If not, why not? Unlike the allegations against VV Mineral and the other four companies, these questions are merely about paperwork and should be asked of the DAE now that attention has been drawn to India’s beach sands. Nonetheless, Thorium holds great promise for India’s energy dreams. The BJP looks more and more certain to win the ongoing Lok Sabha elections, and if they are to keep their manifesto promise to develop India’s Thorium assets, it is time to dispel the dark cloud hanging over India’s fledgling Thorium industry and give it the attention and support that it needs.”

Some other reports suggest that India has the world’s largest reserves of Thorium Ore, or 60% of the world’s Thorium deposits — twice that of the US, Brazil and Australia put together. While these deposits in India are easily accessible in the form of sands (monazite) in our sea beaches, in most other countries, Thorium reserves are embedded in rocks which require elaborate processing to extract — both tedious and costly. 100 Tonnes of mineral rock yields just one kilogram of Thorium. A small place in Tamil Nadu (Manavalakurichi) supposedly has 12 % of World’s Thorium, although some reports suggest it could have as much as 30%.

Thorium Ore can be found all along our sea beaches from Odisha and Andhra Pradesh all the way up to Tamil Nadu and Kerala, easily accessible in the form of mineral sands. After extraction from ore, Thorium does not require energy-intensive enrichment as is the case with Uranium.

From Mineral rich sands (Monazite), it is possible to extract Thorium, Cerium, Cesium, Platinum and Lanthanum, and these minerals are referred as RARE EARTHS and are extremely expensive in global markets.

Thorium in its liquid form burns more efficiently than solid Uranium; liquid thorium reactors do not operate at dangerous high pressures. A Thorium-powered Nuclear Reactor is inherently safe. It doesn’t run the risk of “meltdown” or explosion nor can even a dirty bomb be created. Its nuclear reaction simply stops when its neutron exciter is turned off.

In August 2005, at an international conference on emerging nuclear energy systems in Brussels, Bhabha Atomic Research Centre scientists Usha Pal and V Jagannathan stated that BARC had designed the “World’s Safest Thorium based Nuclear Reactor,” after some seven years of effort.

Thorium is the preferred future fuel because of low radio-toxicity waste. It is rated as a clean fuel and is only slightly radioactive; it is clean with no burden of nuclear waste disposal. In one year, a 1GW Thorium Reactor produces less than 1% of hazardous waste.

Thorium has the potential to replace Uranium as a cheaper and safer nuclear energy source. It is three times more abundant than Uranium in the earth’s crust and contains up to 200 times the energy density. It is potentially usable to breed reactor fuel and can theoretically generate 40 times more energy per unit compared to Uranium. Thorium based Fast Breeder Reactors (“FBR”) can breed more fuel than they consume.

A single Thorium FBR can produce all the Uranium fuel needed for all our 17 nuclear reactors. Usage of Thorium FBR’s would have freed India from importing expensive Uranium fuel from abroad.

India’s post-Pokharan isolation led scientists at BARC to develop a FBR using Thorium — the Indira Gandhi Centre for Atomic Research, Kalpakkam — which has been running for 27 years. India has indigenously built a 500 MW thorium fuelled FBR.

Late President APJ Abdul Kalam had told said that India must develop Thorium based nuclear reactors. Thorium contains 150 times more energy than Uranium and is the most efficient combustible.

The Plutonium, which is bred in FBRs and Thorium reactors, could be used for defence purposes which has the ability to bestow India with strategic advantage over the comity of nations.

On the 24th of January 1966, the father on India’s nuclear power program, Dr.Homi Jehangir Bhabha, died in a mysterious plane crash —when he was on his way to Vienna to attend an IAEA Scientific Advisory Committee meet. Was he assassinated to prevent India from developing atomic bombs? He died just 13 days after Prime Minister Lal Bahadur Shastri died of a mysterious heart attack at Tashkent.

On the 31st of December 1971, Vikram Sarabhai, the father of India’s space program, died of a mysterious heart attack at Halycon Castle Hotel in Thiruvananthapuram, Kerala.

Two of our nuclear submarine scientists, Josh and Shivam, were found dead on railway tracks.

India was the leading creator of Thorium-based FBR nuclear technology in the world, until Prime Minister Dr. Manmohan Singh and then Defence Minister A.K Antony mothballed it for 10 years.

Once the Sonia Gandhi led UPA came to power, Dr. Manmohan Singh followed a policy of severely downsizing indigenous Thorium-based technology programme, thereby making India dependent on foreign countries for advanced nuclear technology. Indian nuclear scientists at Department of Atomic Energy (DAE) claim that by 2013, India would have mastered the technology to build Thorium based 1GW nuclear reactors.

A cartel headed by a Tirunelveli-based businessman, S.Vaikundarajan, main promoter of VV Minerals headquartered in Thisaiyanvilai, Tirunelveli, is depriving India of its precious mineral wealth. As I said earlier, Manavalakurichi in the Kanyakumari district in Tamil Nadu has the world’s largest deposit of monazite, ilmenite, garnet, zircon and rutile, all strategically and economically important minerals and metals. VV Minerals owns 96 out of the 111 garnet mining licences issued by the Indian Bureau of Mines. The Government of India has issued 44 licences for mining Ilmenite and they own all the licences.

The value the Thorium reserves at Manavalakurichi is 720 times more than the 2G spectrum scam, according to leading geologists. VV Minerals, which has monopolised sand mining along the seashore on the basis of its ability to bend and break laws of the land, is exporting the thorium-rich sand. Containers filled with sand from Manavalakurichi are exported through the Tuticorin Port. Instances of boats ferrying sand laden bags to ships anchored off the Tirunelveli and Kanyakumari coasts are regular sights, as per the locals in that area.

The mining baron Vaikundarajan has allegedly made lakhs of crores by exporting ilmenite, rutile, garnet and zircon. Though the Department of Atomic Energy (“DAE”) controls the sand along the coastline, because of the presence of elements like zircon, thorium and ilmenite, officials look the other way, when sand rich in thorium is exported from the region.

Officials of DAE have ignored the wanton looting taking place right in front of their eyes, as they are perhaps on the take. There are allegations that engineers in Indian Rare Earths Limited and DAE were helping Vaikundarajan export Monazite to other countries.

Dr. CSP Iyer, former director, Bhabha Atomic Research Centre, narrates an interesting incident when the Council of Scientific and Industrial Research wanted to find out the impact of mining along South India’s coastline and asked him to prepare a status report. “I was not allowed anywhere near the areas being mined by these private companies. They have something to hide,” he said.

Immediately after the signing of the Indo-US civil nuclear deal in 2007, Government of India amended the Mines & Minerals Act by a Government order, probably under pressure from USA, to facilitate the export of the mineral-rich sand. Until then, private companies were not allowed mining of Monazite because of the presence of Thorium.

The illegal export of Thorium was first noted by scientists of DAE. Since their hands were tied because of bureaucratic procedures, they alerted concerned citizens in Chennai like former secretary to Tamil Nadu Government, V Sundaram and former executive at Asian Development Bank, S Kalyanaraman. Sundaram, an IAS officer belonging to the old school had been Tirunelveli District Collector and knew the district like the back of his hand. “What I found was flabbergasting. I hope Chief Minister Jayalalithaa would bring the culprits to book and save the south Indian coastline from further looting,” he said.

From 2002 to 2012, the quantity of Monazite present along the Indian coastline has come down by more than 2.1 million tonnes. This Monazite, quite rich in Thorium, is reported to have been exported to by a powerful mining cartel, allegedly headed by Vaikundarajan. On the 30th of November 2011, V. Narayanasamy (then the Minister of State in the Prime Minister’s Office and now the Chief Minister of Puducherry, one of the only four states under Congress rule), told the Lok Sabha that IRE, a public sector undertaking, under the DAE, is the only company exporting Monazite.

It must be noted that there are pictures on the internet of Narayanaswamy bending down and helping Rahul Gandhi wear his shoes.

“As per the latest notification of the DAE dated January 20, 2006, these heavy minerals are delisted from the prescribed substances list and hence, for the handling of these minerals, licence from DAE under the Atomic Energy (Working of the Mines, Minerals and Handling of Prescribed Substance) Rules, 1984 is not required,” Narayanaswamy had said. He also said that consequent to delisting of ilmenite, rutile, zircon etc. from the list of prescribed substances, no licences or permission is required from DAE for these substances.

“However, under the guidelines framed by the Atomic Energy Regulatory Board (“AERB”), individual processors of beach sand have to separate and safely keep the Monazite content of such sand. No individual or entity is permitted to process Monazite in any manner without a licence from DAE. Further, no licences have been given to any private party to process Monazite and separate Thorium,” said the Minister.

However, Narayanaswamy did not say whether companies keep the sand containing Monazite with them after they have processed and extracted other minerals from the sand. Scientists and engineers said they were in the dark about the quantity of Monazite extracted by private companies and whether it has been exported or not.

Several scientists disagreed with Narayanaswamy. “Heavy mineral deposits often contain relatively high levels of radioactive elements (Thorium & Uranium). It is difficult to obtain clean separation of Ilmenite and Monazite and physical intergrowths of the two minerals are not uncommon. As a result, Ilmenite concentrates obtained from such deposits often contain high levels of Thorium and Uranium,” wrote J Nell, a noted mineral scientist, in a research paper.

The Atomic Minerals Directorate for Exploration and Research of the DAE, claims India’s coastline has a deposit of 10.7 million tonnes of Monazite from which it is possible to extract 8,46,477 tonnes of Thorium metal.

This was also announced by Narayanasamy in the Lok Sabha on the 14th of March, 2012. He said the Monazite is spread across States like Tamil Nadu, Andhra Pradesh, Kerala, Orissa, West Bengal and Bihar. Tamil Nadu and Andhra Pradesh account for 2.16 million tonnes and 3.74 million tonnes Monazite, respectively.

At about ₹32.5 crores per tonne, the value of 8.46 Lakh tonnes of Thorium is approximately ₹275 Lakh Crores, or $4.25 Trillion. India’s GDP in the current fiscal is expected to be about $2.6 Trillion, so, if these estimates are to be believed, our Thorium reserves are worth 1.63 times the country’s annual GDP.

VV Mineral supposedly exported 15,87,806 tonnes of minerals during from 1999 to 2009 through just the Tuticorin Port. The company website itself claims that their annual export is 3,92,000 tonnes of mineral. If all of this is only Thorium, the value is a mind-boggling ₹127 Lakh Crores per year. Discount it by 50%, and you still have India’s largest scam in history.

IRE officials are silent about the Monazite which the private enterprises were supposed to return to the Government. “It is a gentleman’s agreement and we have to believe what they tell us,” said Dr, CSP Iyer, former director, BARC. It is an open secret that some of the senior engineers of IRE and DAE work as consultants to private mining companies at exorbitant fees, which is 10 times more than what they get as monthly remuneration from the government.

How private companies flourished at the expense of India’s public sector undertakings is best described by the profit they generate by exporting precious minerals and other materials. IRE, with 2700 hectares of mineable land under its control, exported minerals worth ₹97.7 crore during from 2007 to 2010. But VV Minerals and its associates, which own just 187 hectares, earned ₹408 Crores (declared income) during the same period.

Indian media had numerous articles on how Dr. Manmohan Singh led UPA government was securing India’s future energy security by signing the Indo-US nuclear deal (the “123 Agreement”). Mainstream media told us how this deal was going to push India into the big league of countries, by putting us on course to being the next super power. This hype was deliberately manufactured by Sonia Gandhi and her coterie.

The reasons why USA desperately wanted the nuclear deal were clear from the start. It wanted American companies like GE and Westinghouse to pursue nuclear trade with India worth billions of dollars and prevent India’s emergence as a real nuclear military power.

The nuclear deal, called the 123 Agreement, was subject to US laws such as the Hyde Act, and clearly stated that, if India tests a nuclear device, all further nuclear trade will end and nuclear material already sold to India should be returned. With no commitment to supply nuclear fuel, USA put a cap on India’s strategic programme, subjected us to the Non-Proliferation Treaty against our stated policy, and inspection of our nuclear installations through the International Atomic Energy Agency.

India’s indigenous nuclear programme, which was progressing quite well at that time, especially after encouragement during the 6-years of Vajpayee as Prime Minister, were put on the backburner.

As per the 123 deal, India agreed to separate our civilian and military nuclear activity and open up the civilian part to inspection by the International Atomic Energy Agency. In return, the US offered to resume full nuclear trade with India, ending our nuclear expulsion. We carved out two large chunks of real estate in Mithi Virdi (Gujarat) and Kovvada (Andhra Pradesh), and offered them to two multinationals to set up nuclear power plants.

While Toshiba-Westinghouse was given the Gujarat site for building six AP1000 reactors of 1100 MW each (total 6600 MW), and GE-Hitachi was to be given the Kovvada site to set up six units of 1594 MW each (total 9564 MW). Both projects involved untested technologies at that time. In both instances, public sector Nuclear Power Corporation of India was to be the operator.

The aim of the much hyped “Indo-US Nuclear Deal” was perhaps to make India one of the top three markets for American & European companies, rather than a competitor, in the $100 Billion nuclear power technology market. The deal would create a huge market for the Big3 conventional nuclear reactor manufacturers — Westinghouse, Areva and GE.

According to nuclear scientists at DAE, the attention given to the FBR and Thorium program were reduced still further by 2008, when discussions began with international companies about supply of conventional Uranium based nuclear reactors to India. If this had not been done, scientists say that by 2013 at the latest, India may have been able to develop the technology for 1GW reactors, thereby creating an export market with a potential for sales of $4 billion per year, initially. This advantage was handed over to China” Incidentally, China is now on the cusp of mastering the technology of 2GW reactors, while India was being forced in the UPA-era to rely on overseas suppliers for 1GW nuclear power plants.

In 2016, Russian nuclear agency Rosatom commercially commissioned its BN800 FBR, which produces about 800 MW of electricity and supplies it to the Ural region including the city of Yekateringburg.

After coming to power in 2014, Narendra Modi has empowered Indian scientists and agencies to develop Thorium-based FBRs. The indigenously designed and locally constructed Prototype Fast Breeder Reactor (“PFBR”), an important link in India’s quest to gain complete control of the fuel cycle, is nearing completion. Once completed, it would allow the capability to grow “geometrically” and would make India the second country, after Russia, in the world to operate a FBR.

Six FBR units are planned to be set up, of which the first two will come up at Kalpakkam in Tamil Nadu. All six units are expected to become operational latest by 2039, though PM Modi is personally pushing for them to start much earlier. Construction of the two units at Kalpakkam is planned to start by 2021 and expected to begin commercial operations by 2029.

India has been following a closed fuel cycle and FBR is a critical link to it. The PFBR was scheduled to go critical in 2010 but it has missed several deadlines since then. It is an example of public-private partnership and many private industrial players like L&T and Walchandnagar Industries have contributed to the project. The public sector firm Bharat Heavy Electricals Limited is a major contributor in the project.

Founders of India’s nuclear energy programme harped on a closed fuel cycle, which means that India is reprocessing and remaking spent fuel from our nuclear power reactors. We have been following a three-stage nuclear electricity program: (1) pressurised heavy-water reactors (PHWRs) using natural uranium as fuel; (2) FBRs using plutonium and depleted uranium from the PHWRs; and (3) FBRs using abundant Thorium found in India.

Mainstreaming FBR technology and usage is the key to make nuclear energy sustainable in India. FBRs generate more fuel than they consume and are hence termed as breeders. Countries such as the US and France have also experimented with FBR technology programmes.

India’s installed nuclear power capacity is currently 6780 MW from our 22 operational plants, with another 6700 MW expected to be added by the year 2021. The Narendra Modi Government has set a target of achieving nuclear power capacity of 14000 MW by 2024.

PM Modi wants 25% of our electricity needs to be met by nuclear reactors by 2050. USA currently gets 20% of its power from nuclear energy, but this could fall to less than 10% by 2050, due to exceptionally slow construction rates, as getting regulatory approvals from the federal U.S. Nuclear Regulatory Commission to build a conventional reactor can take up to 25 years, while building a new plant by takes about 10 years.

The newspaper article makes no mention of the name of the company accused but the Indian Bureau of Mines reveals the company that matches the description provided – 96 of 111 garnet mining licenses and 44 licenses to mine Ilmenite – to be VV Mineral.