|The recent Supreme Court verdict asking companies to make compensatory payment for the net present value (NPV) of trees being felled for mining operations threatens to hit their profits.|
|As a result of the order, the Orissa Mining Corporation "" the largest state owned public sector company in the mining sector "" stands to end up in the red despite earning its highest profits in the last fiscal. If it has to pay the net present value for trees felled "" pegged at Rs 120 crore "" its entire operational profit for the year will be wiped out.|
|As per the apex court's order, all corporate bodies and government agencies using forest land, for purposes ranging from irrigation to mining, have to pay the net present value of trees decimated. A corpus will be created by respective state governments outside the Consolidated Fund from the funds. The contribution will be in addition to the cost borne by the user towards the provision of compensatory land and afforestation.|
|The corpus will mainly be utilised for the protection and replenishment of the green cover. The court order has further stipulated that the net present value of trees will be calculated by the principal chief conservator of forest of the concerned state. It will be based on the species of trees and density of forest in the land diverted for any irrigation or mining project.|
|The performance of the company and its profitability required a serious introspection, said SC Hota, chairman, Orissa Mining Corporation and additional chief secretary in the state government. The company posted an operational profit of Rs 128 crore in 2003-04, up 535 per cent from Rs 20 crore in the last year.
Green toll to hit mining firms
Dillip Satapathy |