CEC for 30% price recovery for illegal mining in Odisha

For illegal mining in forest areas, 70% of ore value to be recovered

The Central Empowered Committee (CEC), appointed by the Supreme Court has recommended that at least 30 per cent notional value or benchmark rate of iron ore extracted without statutory clearances in Odisha should be recovered from the miners.

In case of miners who carried out illegal mining in forest areas, penalties amounting to 70 per cent of the benchmark price should be recovered from the offending miners, the panel said in its recommendation to the top court submitted today.

CEC has also directed the state government to re-investigate allegations of violation of Rule-37 (of Mineral Concession Rules, 1960) by the mine owners and take appropriate action. “The CEC is of the view that it may be appropriate that 30 per cent of the notional value of iron ore and manganese ore produced by each of the lessees without environmental clearances may be directed to be recovered from the concerned lessees. If the concerned party fails to pay the amount within the prescribed time period (three months), then operations of their mines will be suspended and thereafter should be determined”, it said in its recommendation regarding status of illegal mining in Odisha. The CEC recommendation is much lesser than Rs 61,705.70 crore penalty demanded by the Odisha government from offending miners in cases of excess mining as it has taken only benchmark price issued by the Indian Bureau of Mines (IBM), citing that taking year wise price of different grades of iron ore and manganese is a ‘cumbersome process’.

“The total notional value of the minerals produced without or in excess of environmental clearance, at the weighted average price of minerals published by the IBM adds up to Rs 17,091 crore for iron ore and Rs 484.92 crore for manganese ore,” it said.

The CEC has found that a total of 213 million tonne iron ore and 2.4 million tonne manganese ore were extracted between 2001 and 2010 in Odisha by 72 leaseholders. Out of these, 14 leaseholders, including state run Odisha Mining Corporation (OMC), BPME Ltd, a PSU of Union government, Tata Steel and Aditya Birla Group controlled Essel Mining were responsible for more than 70 per cent of illegally extracted ore output.

For miners who have encroached forest areas beyond lease permit, the CEC has recommended that an amount of Rs 5 crore per hectare (ha) should be collected for dumping wastes of mining activities and Rs 1 crore for carrying out allied activities of mining. Though the CEC lauded the state government’s recent action to curb illegal mining, it commented that the state government and its officials ‘cannot escape the responsibility for such brazen violations of Acts and Rules’.

While examining violation regarding transfer of mining lease ownership, the committee said that the miners and ore extracting contractors took the benefit of lax attitude of the state government officials.

It observed that the payment mode for ore raising contract was either in terms of percentage of total earning made from ore sales or were substantially higher raising cost than ore raised by state-run agencies such as OMC.

“Such practices, if not checked, will have serious consequences,” it said in its observation. The report was submitted in accordance with the Supreme Court order in May this year.