Govt sets ball rolling to sign lease deeds

After passing suitable orders for extending lease validity of 26 mines, the state government has despatched supplementary lease deed forms to these leaseholders.

The mine owners are required to execute the supplementary lease deeds with the government within a span of 90 days. The lease deed form mandates miners to pay stamp duty at the time of signing the agreement.

"The miners will have to pay seven per cent of the average value of their mining (mineral excavation) plan as stamp duty according to rules. This is mentioned in the additional lease deed agreement," said Deepak Mohanty, director of mines.

The state government had amended its Stamp Duty Act in 2013, empowering it to collect the duty from mines which did not have a proper lease deed but were operating as per provisional clearance called 'deemed extension'. Since the deemed extension clause has been removed in the new Mines and Minerals- Development & Regulation (MMDR) Act, the state government has to collect dues from extended lease deeds.

The miners have been opposing the decision to collect stamp duty as per amended rate, saying the revision has been challenged in the court and a decision on it is still pending.

"The miners had moved the Odisha High Court over the state government's plan to revise stamp duty and an interim stay was granted over the case. We hope the government would collect the dues as per old rates and not based on the amended rate," said Prabodh Mohanty, an official of East Zone Miners' Association (EZMA). Miners fear they have to shell out hefty amount if the amended rates are made applicable. "We had to retain workers during the shutdown period. At a time when ore prices have declined to multi-year lows, the burden of stamp duty will be overwhelming," said an official of a large mining firm.

It is estimated that the stamp duty charges would near Rs 10 crore per million tonne of iron ore production.

The 26 mines include 22 iron and manganese ore mines and the rest being dolomite and limestone leases. Miners whose lease validity have been extended are Tata Steel, Aryan Mining & Trading Corporation Pvt Ltd, Bonai Industrial Company Ltd, Rungta Mines, Fee-grade & Company Ltd, OMM Ltd KJS Ahluwalia, Kaypee Enterprises, Kalinga Mining Corporation, KN Ram & Company, Vivek Lall and Bargarh Cements. The 22 iron ore mines were shut down by an interim order of the Supreme Court in May last year. The government said it would take strict action against the miners if they refuse to sign the lease deeds within the deadline. "The miners have to sign the lease agreement within the deadline. If a miner fails to do so, then the state government will have to take a decision about the lease," said Prafulla Kumar Mallick, state steel and mines minister.