By Our Correspondent
KOIRA/BARBIL/BHUBANESWAR: It seems, Naveen Patnaik led Government in Odisha is showing undue favour to Sajjan Jindal led JSW Steel in State’s mineral rich Joda-Koira regions of Keonjhar and Sundargarh. The latest move has cost Rs 203 Crore to State exchequer.
Lower floor prices of range of Rs 2,400- 2,500/tonne of iron ore lots under Auction Notice of JSW Steel vis a vis higher prevailing market prices hovering at Rs 8,400/tonne for lumps and Rs6,000/tonne for fines has led to loss of revenue of over Rs 203 crore in a single auction alone, sources said. The JSW Steel won 4 big size iron ore and manganese blocks with combined capacity of 29 MTPA which is presently 59% of the total auctioned mines operating in the State. These mines have dispatched only 23% of minimum dispatch requirement of 13.35 million ton in this financial year on pro-rata basis.
Sources closely monitoring JSW Steel’s Mining operations in Odisha, the proposed e-auction of for auction of iron ore in the form of run-of-mine (ROM) from Nuagaon and Jajang iron ore mines is allegedly a gross violation of rule 2(f), rule 39 and rule 49 of MCR 2016 and will lead to revenue loss of Rs 203 crore towards premium, royalty, DMF, NMET and shortfall in minimum dispatch requirement under respective MDPA(s).
Activists in Odisha said both the IBM and Steel and Mines Department should examine the Auction Notice of JSW Steel to clear the doubt. Sources further alleged that the size specification of iron ore ROM under e-auction notice is 10-180mm whereas run-of-mine (ROM) is defined under rule 2(f) of MCR 2016 as the raw, unprocessed or uncrushed material in its natural state obtained after blasting or digging, from the mineralized zone of a lease area. Thus, ROM consists of material of size below 10mm and size above 180mm besides the size range of 10-180mm. In this JSW is selling lumps under the garb of ROM. Further, grade of lot of iron ore ROM Jajang iron ore mine have been shown as 56-60% Fe whereas there is no such grade band of iron ore either in statutory return Form F 1 and Form G1 under rule 45 of Mineral Conservation and Development Rules, 2017.
“We have requested the IBM, to clarify the sale price of ROM and not to include it in the calculation of Average Sale Price (ASP) of different grades of iron ore lumps and fines.
It said the iron ore lumps and fines are different commodities than ROM as clearly defined in law,” one activist said. “State Government should seek a clarification from the IBM that the sale price of ROM will not be included in the calculation of the ASP of iron ore lumps and fines, and unless this is obtained, the auctions may be put on hold/annulled as this is a clear design to substantially reduce the State revenues,” they added.
Months back, Director of Mines had served show cause notice to JSW Steel. In its show-cause notice to JSW Steel, the Director Mines mentioned that, in Narayanposh iron ore mine, the JSW has dispatched only 2,45,829.58 MT iron ore which is 4,81,853 MT iron ore and 388. 47MT Manganese ore short of the prescribed target of dispatch and, thus, JSW violated Rule 12A(1) of MCR read with Para 8.1and schedule “D” of the MDPA.
In Ganua block, the JSW has dispatched only 34,683.17 MT which is 78,419 .83 MTs short of the prescribed target of dispatch. In case of Nuagaon block , the company dispatched only 2,56,718.98 MT which is 7,53,081 .02 MT short of the prescribed target of dispatch In Jajang block, it dispatched 3,07,173.48 MT which is 17,70,736 .08 MT short of the prescribed target of dispatch. Thus till September 21, the JSW Ltd’ total dispatch shortfall was 30, 84,090.91 MT. Calculating at conservative prices 62-65%Fe grade iron ore at Rs 3,286 per tonne for lumps. The officials of Directorate of Mines recently conducted spot visits of Jajang, Nuagaon, Ganua and Narayanposhi iron ore mines of JSW.
The JSW had violated Rule 12A(1) of MCR, 2016 read with Schedule D of MDPA in ensuring minimum 80% dispatch of the average of the annual production of two immediately preceding years on pro-rata basis from the auctioned mines, which resulted Rs 1,154.68 crore loss to Odisha.
Till September, the JSW failed to dispatch 30, 84,090.91 MT iron ore as per agreement for which the Government lost huge amount of revenue. The Mines Director slapped show cause notice to the JSW for violation of the MCR rule. The Director earlier had written to the JSW to take steps to ensure strict adherence to the above mentioned provision and maintain the prescribed production and dispatch; otherwise it would be liable for action in accordance with the rules.
