With iron ore contributing 60 per cent of the total mining revenue, the fall in the dispatch of this mineral has affected collection of mining revenue. So, the Department of Steel & Mines (DoSM) is working out strategies to augment the production and dispatch of the minerals.
Additional Chief Secretary, Finance, UN Behera, recently made a review of non-tax revenue collection in general and mining revenue in particular.
Though the target up to the end of September 2014 was to the tune of `2,716 crore, only an achievement of `2,044 crore was made resulting in a shortfall of 24 per cent.
The total dispatch of iron ore up to September 2014 was 22.32 million tonnes (MT) against 28.47 MT for 2013-14 up to the corresponding period. This decrease in dispatch clubbed with the fall in average sale price of iron ore has resulted in the shortfall of mining revenue, revealed a senior official.
The major cause for this decline is attributed to the decrease in average sale price of iron ore. It is observed that the sale price of iron ore stands at the lowest in last five years.
The same trend is also observed in the publication of average sale price of iron ore by the Indian Bureau of Mines (IBM). Thus, there is a decrease of `200 per tonne on an average compared to the last year in both lumps and fines, thereby decreasing the royalty revenue collections.
However, the Directorate of Mines is hopeful to make up the shortfall as there has been a 50-per cent hike in royalty on iron ore from September 1, 2014.
Since there is no revision in the royalty on coal, a major revenue improvement can be done only through an improvement in production of iron ore, an official said.
There are 36 mines presently under operation in the State for production of iron ore, out of which 29 are non-captive. The production limit as per the approved environmental clearance (EC) in respect of these 29 mines is 42.36 MT, against which production achieved up to end of September 2014 was 17 MT.
Keeping in view the trend of production and the available infrastructure with the mines, the total production by the end of 2014-15 from these 29 mines may reach a figure of 32 MT to 35 MT, said sources in the Directorate of Mines.
In order to augment the revenue collection and make iron ore available for the industries in the State, the State level Task Force at its recent meeting allowed 20 MT of iron ore already produced and stored in the mines to be dispatched in addition to the ore they would produce.
The total quantity to be dispatched is to be distributed among the respective mines, which are found to be well within the overall capping limit of dispatch of 44 MT for the Joda Circle and 13 MT for the Koira Circle, said an official.
The total dispatch of iron ore would be properly monitored to ensure the existing provision of supply to the domestic units (at least 50% of the total production), said sources in the DoSM.