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High Bid Premium Effects : Big Corporate bleeds Odisha of Rs.1964 crs

  •  Director mines instructed to issue demand notice

By Bijay Mishra,Bhubaneswar

(Fast Mail News) -The high bid premiums in the recently concluded iron ore auctions which had brought joy to the people and government became now a disaster with a loss of around 1964 crs to the state exchaquer .


From the very beginning many organisations including MASS warned the Govt. about unsustainable premiums above 100% are and such mines can only be made profitable only by adopting malpractices or using influence at the Central government level for policy changes. Sadly, both have begun.


The new lessees are manipulating the grade of iron ore and paying mining levies applicable removing higher Fe grades and paying for low grades, resulting in huge loss to the exchequers on account of Royalty, Premium, DMF and NMET. Further, deployment of statutory manpower by new lessees for safety of mine workings and personnel employed therein are far below the minimum requirement under MCR2016and MCDR 2017, lead to seriously affecting livelihood of people.


On a representations of MASS , the officials of Directorate of Mines recentely has conducted spot visits of Jajang , Nuagaon , Ganua and Narayanposhi iron ore mines of JSW and Thakurani iron ore mines of Arcelor Mittal India Ltd . As per the Diirector, Mines letter No 6605/ 23-9-20. to JDM ,Joda and DDM ,Koira , it is revealed that the above mines lessees are deliberately not making the stacks in proper geometrical shape. The stack yards are not within the specified area as per the approved Mining Plan, and grade of iron ore is not proper and much higher than the application made for Transit Permit. The Quick dispatch system installed at mines has many deliberate gaps to mask process gaps. The Statutory persons were not present/ found to be deployed at places of work under MMR 1961. In the said letter , the Director Mines instructed to the JDM and DDM to issue demand notice to the lessees for payment of differential royality and premium of the stacks and strict follow Rule -10 of OMR -2007 while issuing permission for removal stocks



Out of 1901million tones reserves of iron ore, 1131million tonne (59.49%) was acquired by JSW and 179million tonne (9.4%) was acquired by Arcelor Mittal India Limited, total 68.91% of total resources.These two companies have no steel plants in the State and won the blocks with intent to supply of their plants located outside the State and adopting malpractices in mining operations and dispatch grade of ore leading huge loss the State Exchequers.


Calculating at most conservative values on 67% dispatch of iron ore in the band of above 62%Fe in the State of Odisha as per the IBM Year Book, the estimated loss of revenue in terms of premium will be Rs.1343Cr. (67% Rs.2005 = 1343Cr). In case stacking of mineral is disposed off to prevent pilferage of grade and making royalty payable at highest grade of 65% lumps, the recovery of Rs.621 Cr. could have envisaged. Thus, total estimated loss will be Rs.1964Cr annually.


In view of this MASS demanded to ensure Stacking of minerals most be only on the designated areas earmarked in the approved Mining Plan. There most be provision for reduction of dimensions of stacks based on the field observations of the concerned mining offices to ensure safety and proper up keep of accurate account .The transit permit most be granted based on evacuation infrastructure at mines end and field verification of safety standards.


 Vigilance of stacks and transport of mineral using drone technology most be adopted at the earliest.


There shall be minimum five days gap between date of making application in Form J and grant of Transit Permit in Form L so that the site inspection by the officials of the concerned mining circles could be conducted.


Govt most ensured that material should be allowed to be removed from the stacks which have been sampled and approved.

The royalty of highest grade of mineral most be computed for all dispatches of mineral applicable for auctioned as well as non-auctioned blocks.


The State government most not come under pressure and increase the existing law of making separate stack for every 4000tones.It most be ensured that the revenue collection from the lessees should not decrease from what existed at the time of auction. " These corporates most not be allowed to first bid with high premiums, and take away all the iron ore from Odisha to other States ,and then adopt methods through malpractices, and shrewd policy advocacy, to even taken the due public money."- told Mr Subrat Tripathy, Secretary, MASS.

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