By Our Correspondent
BHUBANESWAR: BJP MP from Bhubaneswar and Party’s National Spokesperson, Aparajita Sarangi, has proved a point. Off late, DDM (Joda) in Keonjhar and DDM(Koira) in Sundargarh, finally acted against Sajjan Jindal led JSW Steel in Odisha.
JSW Steel has received two demand notices of Rs 702 crore for its Odisha mines related to alleged loss of royalty, mining premium, and other levies for manipulating iron ore grade. The demand pertains to allegations over a drop in the grade of iron ore mined during FY22 and the current FY23, compared to the submitted mining plan.
Meanwhile, JSW Steel has has contested the demand with revision applications filed before the Revisionary Authority of the Ministry of Mines.
This is not the first time the company has received a showcause notice from the state. In FY22, the Odisha government issued a showcause notice alleging a shortfall of minimum production quantity and a demand notice in August 2021, raising a demand of Rs 697 crore (including penalty) as prescribed in the Model Mine Development and Production Agreement (MDPA).
The MP Sarangi had earlier alleged about irregularities in Jajanga Iron Ore Mines, Ganua Iron Ore Mines ,Gorumahisani Iron Ore Mines, Badampahad Iron Ore Mines, Jaribahal Iron Ore Mines , Roida-II Mines block. Sarangi, had already raised the matter in Lok Sabha
The Naveen Patnaik led Odisha Government in a letter to the Ministry of Coal and Mines had admitted that leaseholders reported high-grade iron ore as low-grade after extraction. The State Government in a letter to the Ministry of Coal and Mines had admitted that leaseholders reported high-grade iron ore as low-grade after extraction.
The State government had auctioned several iron ore mines in 2020-21. Surprisingly enough, the new leaseholders started claiming the minerals were of low quality. The mines used to have high-grade iron ores for 20 to 30 years. But within one year, the percentage of low quality iron ores increased so much. In April and May 2022, this increased to 42.3 % and 58.9% respectively.”
Consequently, average sale price reduced, bid amount reduced, district mineral funds started getting less money and the State exchequer suffered a loss to the tune of crores and public welfare programmes were badly affected.
IBM analysis shows that there is a drastic change in grade wise reporting pattern of the production and dispatches by some of the lease holders especially auctioned mines in Odisha and more so after incorporating lower grade in the monthly return format in the portal. IBM also found that there is also a reduction in EMP reported by the lease holders particularly for lower grade, less than 55% particularly after inclusion of lower grades in the return portal.
AH Ramtake, Director, Mining and Mineral Statistics Division of Nagpur based Indian Bureau Mines, in a letter dated August 11, 2022, had written to the Joint Secretary, Ministry of Mines regarding under reporting of ex-mine price (EMP) and grade of Iron -Ore. The IBM missive to Mines Ministry came following such cases found in Odisha.
IBM further said “since April 2022, lease holders are submitting thier statutory monthly returns in form F-1 as per the format prescribed in MCDR-2017 amended up to April 2022. Based on the past months data, it has been observed that some of the lease holders that are reporting more production and dispatch in the grades less than 55% at very low ex-mines price. Therefore , a comparative analysis has been done for the 1st quater of FY-2022-23 grade wise dispatches and emp with the last quater of FY-2021-22 and FY-2020-21 and FY-2019-20 for the leases that are reporting grade wise production and dispatches less that 55% in Odisha.
‘This may be probably due to some malpractices adopted by the lessees showing higher quantities in lower grade and to reduce the ASP published by IMB and thus reduce the payments like premium, royalty, DMF, and NMET to be made to the State Governments which are directly linked to ASP. Therefore, it is necessary that the State Government officials do proper sampling of ore to be dispatched to ensure proper computation of ex-mines price in the invoices for preventing loss of revenue due to false declaration of grades with low ex-mines prices,’ the IBM letter to Mines Ministry said.
The IBM said “ As per section 23C of the Mines and Minerals (Development and Regulations) Act -1957, State Governments have been empowered to make rules for preventing illegal mining, transportation and shortage of minerals and for the purposes connected therewith , so concerned State Governments may be asked to develop and follow SOP for preventing loss of revenue due to declaration of higher grade as lower grade with lower ex-mines price . Further, if the State Governments request the agency proposed by the State Government may be allowed to carry forward the investigation for obtaining information on available grades of iron ore leases,”
Official sources said, as per Rule 45 of MCDR -2017 , lease holders are required to submit statutory monthly and annual returns to IBM online. The MCDR Act-1957 was amended in 2015 and the concept of Average Sale Price(ASP) for major minerals has been introduced. Accordingly, IBM in accordance with the Rule-42(3) and 43 of Mineral Concession Rules-2016 regularly compiles and publishes ASP of minerals for each month on the basis of online monthly returns submitted by the mine owners. .
