Odisha govt draws flak over ore sale by Sarada Mines

Congress MLA Naba Kishore Das seeks explanation from state govt on steps taken against lessees like Sarada Mines

The state government today faced the ire of Opposition in the assembly over the allegation of sale of iron ore by Sarada Mines at very low rates compared to prevailing market prices.

Congress MLA Naba Kishore Das sought explanation from the state government on steps taken against lessees like Sarada Mines that have resulted in lower value added tax (VAT) collection for the state government.

“Iron ore fines are being sold by Sarada Mines at only Rs 237 per tonne compared to Rs 1,727 a tonne of Odisha Mining Corporation (OMC) and Rs 2,060 per tonne of Odisha Minerals Development Company (OMDC). The state is losing by way of lesser VAT collection due to under-pricing of the ore,” said Das.

Finance Minister Prasanna Acharya clarified that the iron ore rates are fixed by the Indian Bureau of Mines (IBM) and not the state government.

The minister said, between April 1, 2008, and March 31, 2011, the state government had raised a demand of Rs 397.12 crore by way of VAT of which only Rs 10 crore has been realised. Entry tax collection from the company was only Rs 3 crore against a demand of Rs 99.28 crore.

Notice was also issued to Sarada Mines for violation of Rule-37 of Mineral Concession Rules- 1960.

The lessee was selling the entire run-of-mine (ROM) produce from its Thakurani mines in Keonjhar district to Jindal Steel & Power Ltd (JSPL) without any agreement. The notice was served on the lessee on the basis of the report of a five-member panel of steel & mines department.

According to the enquiry report of the committee headed by PC Patra, deputy director of mines (Bhubaneswar), the major benefit of the mine is flowing to JSPL. The present arrangement of selling ROM to JSPL by Sarada Mines amounts to transferring the interest in the mining lease to the steel company as per provisions of Rule 37 of MCR-1960, the report stated.

The arrangement also contributes to lower value added tax (VAT) collection by the state government on account of low pricing of ROM by the lessee compared to market prices.