Closure of 7 mines not to impact production in Odisha

Bhubaneswar: The Odisha government on Friday said the mining production would not experience much impact after the closure of seven working mines, which have defaulted in paying penalty as per the Supreme Court order.

“I don’t expect much impact on production following the close down of the mines. Several mines were closed down earlier and despite that Odisha has increased its production capacity,” said Odisha steel and mines secretary R.K Sharma.

Sharma was addressing a roundtable on Odisha mining scenario organized by Federation of Indian Chambers of Commerce and Industry (FICCI) here.

The state government has closed down seven working mines including six iron ore and one manganese mines, which have not paid the full compensation amount.

Odisha has collected over Rs 10,000 crore as a penalty against the demand of Rs 17,576 crore from mine leaseholders for illegal mining. It had issued the notice to 131 mining leaseholders as per the direction of the Supreme Court to collect the imposed fine by December 31 last year.

Sharma said that miners have to comply with all provisions of the law to smoothly doing business.

To overcome the judiciary problem, miners can file a curative petition in Supreme Court, he added.

As mines are subject to central government, the state government has little option to do so many things. So, he advised the miners to approach the appropriate forum.

Jindal Steel and Power Ltd executive director Manish Kharbanda requested the Odisha government to urge upon the Central government to formulate a legislative framework to allow the non-operating iron ore mines to start operation with a deferred penalty payment mechanism.

Notably, 102 number of iron ore mines in the state are non-operational since last 4-5 years and 7 more operating mines have become non-operational post 31st December 2017 because of non-payment of penalty as per the  Supreme Court order on 2 August 2017.

The roundtable meeting in its resolution pointed out that there is a huge shortfall of around 25 MTPA of iron ore in the state, which is likely to go up further as the installed capacity utilization of the state-based steel industries increase.

“This has resulted in a steep increase of iron ore prices in the state (59% in last 2 months and approximately 100% increase in last 6 months). This price rise has driven the input costs of the state-based steel industries to unviable levels,” it added.

On account of closure of the seven mines, there has been a shortfall in the dispatch of 18 Million Tonne of iron ore resulting in an annual revenue loss of Rs.900 crore towards royalty.

It said the closure of mines has resulted in a loss of 1 lakh direct employment and 2.5 lakh indirect employment in Odisha.

With the state-based steel industries now being hit for a stiff increase in iron ore prices, a vast section of livelihood in the state, dependent on the industry and mining sector is badly affected.

It is submitted that the lessee’s at Odisha are not responsible for interruption caused due to the pendency of the matter before the Supreme Court for more than 4 years.

When the period of the mining lease is interrupted due to any act or omission of the authorities of the state government or Central government or court of law, the lessee should get the benefit of adding the period of mining lease for the period which was interrupted due to circumstances beyond the control of the lessee.