After the Supreme Court’s decision on August 2 to recover 100 per cent penalty from Odisha’s mining companies towards mineral raised without forest and environment clearances, the order has shaken the companies as the penalty is likely to lead to closure of most mining firms.
Out of 187 iron and manganese mines in the State, only 41 mines are working while the others remained closed due to lack of statutory clearances and other problems since 2009. Instead of mining leaserenewal, leases operating under deemed extension will expire by 2020 and these will be put for auction. While most mining leases will expire in next two years, the heavy penalty to be paid by December 31 will add to the woes of the mining sector.
In a meeting of the East Zone Mine Owners Association in Bhubaneswar, all lessees have expressed their inability to pay such huge penalty as they have invested the money in value addition and expansions. It is like a death sentence served on mine owners, a member lessee remarked.
During the MB Shah Commission of inquiry, 55 lessees were issued show cause notice by the State for violation of EC and FC Act. While the State Government had initially slapped penalty notice of Rs 61,705 crores on the erring lessees after a preliminary assessment basing on the sale price of ores in public sector mines, it later slightly camedown in its figure after the lessees objected to it in the court. The CEC working under the Supreme Court was assigned to make an independent inquiry and assessment on the violation and illegal excavation of ores in 2010.
The CEC in its report to the Supreme Court has made an assessment of Rs 17,041 crore value of iron ore and Rs 484.92 crore of manganese excavated since the year 2000 onwards without clearance basing on the IBM bench mark price during the concerned period. However the CEC recommended to recover 30 per cent penalty of this cost price from the lessees which was turned down by the court.
According to the court order, 100 per cent value that is Rs 17,526.16 crore is to be recovered as penalty from 102 lessees. According to sources, in a High Power meeting of the State Mines Department recently, it is proposed to collect additional penalty for excess mining beyond approved mining plan and Forest Conservation Act which may add a few more crores to the penalty assessment. The State
Government undertaking, OMC has been advised to get prepared for paying the penalty.
lured by the prospect of earning a huge revenue, officials at the State Mining Department are excitedly working on the modalities to calculate the penalty on different lessees and expedite its collection at the earliest