The proposed increase of the permissible iron ore stack size from 4,000 tonnes to 25,000 tonnes, nearly six times of the present stack norms, will lead to a huge revenue loss of over Rs 1,80,000 crore over the granted lease period of 50 years.
Submitting details to the State Government, MASS, an organisation of social activists, mentioned that some new mine owners , who have taken mines at unsustainable premiums, were pushing hard for this increase in ore stack size and it appears that the Government is also inclined to grant this favour.
The calculation is for only six mines and the actual loss will be humongous if all the mines are taken into consideration. Such proposal was earlier rejected by the State Government, it said.
The proposal for increasing the lot size from 4,000 tonne to 25,000 tonne of individual grades of ore will severely affect the dispatch and the revenue loss would be by thousands of crores to the State treasury. This will give the ropeway for easy manipulation of grades by lessees due to large lot size.
It will be difficult by the mine officials to collect a representative sample and verification of grades thereof. In the present scenario where there is not even the provision of any automated mechanism to ensure accuracy, such a proposal will only ensure fraud and non-compliance.
Recently, the mines officials found discrepancies in the stacks violating the rules in some mines and fined them heavily. It is estimated that there will be a revenue loss Rs 3,474 crore annually to the State considering EC limit of 49.95 mtpa of five major auctioned mines of Jajang, Nuagaon, Narayanposhi, Ganua iron ore mines of the JSW Steel Limited, Thakurani iron ore mine of M/s Arcelor Mittal and Balda iron ore mine of the Serajjudin company.
The State Government can generate an additional revenue of Rs 14,288 crore per annum on computing premium, royalty, DMF and NMET at an average sale price of the highest grade of lumps on 49.95mtpa auctioned mines, the MASS said.
Changing rules post-auction is only to benefit big corporate houses who won maximum blocks with exorbitant premiums higher than market prices. Any substantial change in the rules benefiting only a few lessees will lead to serious litigations besides a huge loss of revenue and may jeopardize the auctions.
The MASS suggested that in all fully mechanized mines, mining levies may be computed at the highest grade of lumps for all dispatches of mineral applicable for auction as well as non-auctioned blocks. The stack size of 4,000 tonne must be maintained and must not be increased to prevent loss of revenue to the State Government.
The MASS urged the Government to immediately act on the manipulation of big corporate houses who have taken mining lease at very high unsustainable premiums.