While the most abnormal, conspiracy-driven iron ore auctions with premiums as high as 135 per cent for the mines in Odisha have widened ample scope for a massive mining scam, the Citizens’ Action Forum (CAF) and the Janmat (Joints Action Network of Mines Affected Territory in an urgent meeting declared to work as the watchdog. They urged the Government to immediately clarify about the aggressive bidding and possibility of mining scam.
"The aggressive biddings with an aim to loot the State's precious iron ore are the reasult of a nexus between a few industrial houses, close to the power corrider, political leaders, bureaucrats and mines contractors," said secretary CAF CR Sahu.
The first block that was auctioned for Nuagaon mines of 792.93 MnT reserves was won by JSW Steel Ltd with 95.2 per cent bidding for the block. The second block was auctioned for Narayanaposhi mines with 190.6 MnT reserves and was also won by JSW Steel with its bid at 98.55 per cent. The JSW Steel bagged the 14th iron ore block in auction by committing to pay 110 per cent of the sale to the State Government for Jajang in Keonjhar district. The Thakurani(reserves 180 MnT), fetched a premium at 107.55 per cent and was won by ArcelorMittal. The Balda iron ore (reserves 210.17 MnT) was retained by Serajuddin and Co. at a premium of 118.05 per cent. Shyam Ore even bagged the Jilling-Langalota iron ore block in Keonjhar district by committing to pay 135 per cent of sale to the Odisha Government. The Tata Steel, Steel Authority of India Limited and JSPL have not been bidding aggressively, sources said.
This premium is a percentage of the price of the iron ore that is set by the Indian Bureau of Mines each month for di?erent States and grades. The premium will be taken by the State. So Serajuddin and Co. which owned at a premium of 118.05 per cent will pay 118.05 percent of the monthly value of the IBM set price of iron ore to the State Government. This will be on per tonne of iron ore sold by the company.
Apart from the premium , the new owners will pay to the State Government a royalty of 15 percent of base price, DMF fund contribution 30 percent of royalty and National Mineral Exploration Trust of 2 per cent of royalty that will be charged separately on the base price. Premium and royalty will be charged on sales of iron ore, sources added.
The high premiums will lead to illegal minning, unethical market manipulation, rate fixing and other massive mines corruption. Since many of the large companies are emerging as the winners, they will become the new price makers in the market and the ultimate burden will pass to the consumers, the CAF and JANMAT alleged.
The forums expressing grave concern over the manipulated system of iron ore minning business in the State, urged the Government to act immediately to ensure the interest of the State and the people was protected.