Mining companies has to pay Rs. 57,904 crores to Odisha government

While lot of commotion going on about the illegal mining licenses in Odisha and the allegation about Naveen Patnaik's government  being in hands in glove with the mining mafias, now the Odisha government has come up with a novel idea. With this idea the government wants to hit two goals with a single arrow. While this new strategy will make the Odisha government to follow the M B Shah findings, at the same time it will also help it to fill its exchequer. 

As a fallout of the MB Shah Commission report on illegal iron ore mining in Orissa, the state government has levied a fine on 27 mining firms, including for captive mines held by state-owned Steel Authority of India and the private sector Tata Steel, totalling around R57,904 crore. According to the state government, these companies had mined in excess of the quantity permitted under various statutory clearances during 2001-10 and, therefore, need to pay the price of the excess ore mined.

However, sources in the Orissa government said the state has no plans of cancelling the mining leases of these firms, so there’s no immediate threat of any crisis in terms of supply of iron ore to the steel industry, for which it is the chief raw material. This is crucial because Orissa contributed around 62 million tonnes (mt) of iron to the country’s overall production of 140 mt during FY13.

The central government has also said that rather than banning production of ore or cancelling mining leases, a more prudent approach would be to look into alleged violations on a case by case basis. For instance, the Orissa government has said that action has already been taken against illegal mining in the Joda circle. Similarly, the railways will look into and take action in cases where excess ore was transported by rail by evading freight and other duties.

Industry sources told FE that almost all the companies that have been fined by the state government under Section 21(5) of the Mines and Minerals (Development and Regulation) Act, 1957, have challenged it before the mining tribunal under the Union mines ministry.

The companies contend that there were no regulatory violations by them.