Non-lifting of iron ore irks government

Drop in ore despatch results in Rs 2,000 crore mining revenue shortfall

Worried over the shortfall in iron ore despatch from different mines, a factor impairing revenue collection from the mining sector, the state government has instructed the deputy directors of mines (DDMs) of Joda and Koira circles to ensure that all allotted quantities are lifted by March 31, 2015.

The DDMs/mining officers (MOs) of the respective circles are to intimate the allocated amount to the concerned lessee and the allotted industry.

It may be noted due to less despatch, the mining revenue collection has fallen short of the target by about Rs 2,000 crore, causing concern for the government.

“The allottee industries should submit an undertaking with the respective DDMs/MOs of the concerned circles indicating their acceptance of allocation within 10 days of receipt of intimation from the DDM/MO concerned failing which the allocation made will be cancelled and the matter will be dealt as per the provisions of the government notification dated June 26, 2014. Each allottee shall also submit an unconditional and irrevocable bank guarantee in favour of the Director of Mines for a sum equivalent to 10 per cent of the pecuniary value of the mineral allotted as per format”, Deepak Mohanty, director of mines said in a letter to DDMs of Joda and Koira.

Joda, one of the key iron ore producing circles has an iron ore despatch shortfall of 3.49 million tonne in the non-captive mines in January 2015. The iron ore despatch limit for January was fixed at 4.53 million tonne for January of which only 1.03 million tonne was despatched. Production from non-captive iron ore mines in the Joda circle is projected at nearly 20 million tonne in this fiscal while despatch limit has been capped at 24.69 million tonne.

Substantial quantities of iron ore are yet to be lifted from captive mines like Unchabali, Balda, Jajang, Roida-C and Dapahar mines to name a few.

To overcome the crisis, the steel & mines department today convened a meeting of miners and end-use industries.

“The discussions centred on means to scale up iron ore offtake so that it benefits both buyers and sellers and adds revenue to the state. Revenue collection from mining depends on despatch. Last fiscal, the iron ore offtake was 15 million tonne. In 2014-15, we expect the offtake to be around 15 million tonne,” said Prabodh Mohanty, secretary, East Zone Mining Association (EZMA).

Recently, state run miner Odisha Mining Corporation (OMC) agreed to supply 2.5 million tonne of iron ore to the state based steel units for the January-March quarter as per the government resolution to reserve 50 per cent of the output from merchant mines for state-based user industries. The resolution, promulgated in December 2012, was initially applicable for private mines, but later the scope was extended to the mines operated by state-owned Odisha Mining Corporation (OMC).

Steel units were allocated 4.2 million tonne of iron ore for the January-March quarter from standalone miners.