State glosses over as OMC skips penalty for Roida C mine

The decision of the Odisha government to allow state run mining entity- Odisha Mining Corporation (OMC) to operate all its iron ore & manganese mines despite the corporation skipping payment of compensation for excess production at its Roida C block has seemingly irked the private miners.

The state government has showed the Roida 'C' iron and mining lease to be operated by another PSU- Industrial Corporation of Odisha Ltd (IDCOL) and shut the operations of this mine for non-payment of compensation as ordered by the Supreme Court. But, government records, including its i3MS (Integrated Mines & Minerals Management System) blatantly point to OMC's status as the de facto lease holder of the mine.

The Roida 'C' mine, along with 130 other leases, was slapped with a demand notice of Rs 105 crore as per the Supreme Court order for recovering cost of overproduction from miners for violating the environment clearance limits.

When IDCOL defaulted in payment of compensation by the December 31 deadline, the department of mines stopped its operations along with Roida-I mines of Mesco, Raikela iron ore mines of National Enterprises and Tantra iron ore mines held by Korp Resources Pvt Ltd.

Other private lessees who incurred partial payments also had their mining operations in the state completely sealed. Serajuddin paid Rs 15 crore against its demand notice of Rs 748.31 crore for its Balda block iron ore mines. Likewise, Essel Mining & Industries Ltd and OMM Pvt Ltd paid their full share of compensation for the working mines operated by them. However, their operations, too, were stopped as they defaulted in payment in respect of their non-working mines. Essel Mining paid in full as per the demand notice for its Koira iron ore & manganese mines but defaulted against non-working mines- Jillinglonglata and Kasia iron ore mines.

The total compensation assessed by the state mines department was Rs 19,258 crore- this was made up by Rs 17417.99 crore for EC violation and Rs 1840.87 crore for non compliance of the Forest (Conservation) Act, 1980. Actual collection was Rs 8289.87 crore received from 82 mine lease holders- this included 44 working leases and other 38 non-working mining leases.

The discrepancy in shutting down mines has some private owners sulking. Observers feel the state government's decision to spare OMC could even spark a legal battle.

But, government officials sought to allay concerns. "There was an old arrangement between OMC and IDCOL wherein the latter was allowed to raise iron ore from the mines. Since IDCOL was operating the mine and paying royalties, it was decided that it should be paying the compensation", said a government official.

Though Roida 'C' mine was worked out by IDCOL, OMC has continued to be the lease holder. The mining PSU has steered clear of complications and feels operations of its other mines would not be impacted.

"It (closure of Roida C mine) is not impacting the OMC mines as the demand notice was served to IDCOL", said R Vineel Krishna, managing director at OMC.

It remains to be fathomed if lack of clarity on the title of the lease has triggered the crisis. OMC paid Rs 2177.97 crore as compensation, the highest by any mining lessee in the state. However, OMC dodged the payment for Roida C mine since the demand notice was not served in its name. Spread over 192.81 hectares, the mine fed IDCOL's Kalinga Iron Works plant.