The MB Shah Inquiry Commission has estimated the size of illegal iron ore mining in Orissa at Rs 60,000 crore and has said half of the profits from mines in the state should go to the local population.
The commission has, however, let off large mining companies including Tata Steel, Essel Mining (Birla group) and SAIL from any fresh probe. It has not found any evidence of illegal mining by these companies but that of over extraction from their mines.
The commission set up under a Supreme Court order in 2012 has demanded a CBI probe into these illegal mining. To block such mining, the commission has recommended that export of iron ore from the state should be banned as it cuts the incentive to mine the ores.
However, the Naveen Patnaik-led state government has ruled out any such probe saying its own administrative and police machinery can handle illegal mining cases. But Shah has insisted that wherever the state police has filed FIRs those too should be entrusted to the CBI.
Even before the report had been filed, export of iron ore from Orissa has dipped to 4.34 million tonnes in FY 13 down from 10.01 in the year before. High export duty, low demand from China and a hostile regulatory environment are responsible for the drop.
In its report recently submitted to the Union mines ministry, it has also traced how illegal miners produce false excise certificates to claim a lower freight rates from the Railways. The Railways charge lower rates for domestic transport of ore compared with exports.
The miners used the lower charges to earn about Rs 1,900 crore in six years while exporting the ore too. The commission has asked Railways to ask CBI to probe these freight evasion. Alarmed by the panel’s suggestion, the Railways have informed the commission that it has detected such evasion cases against 14 companies and have issued them notices to recover an amount of Rs 1,874 crore.
The scale of evasion is particularly high in south eastern railways zone.
The report by the commission is likely to be discussed by the Union Cabinet on Thursday for tabling in Parliament.
“The value of unlawful extraction of iron ore is about Rs 59,203 crore. Till now, wealthy and mighty persons got the leases. They pay meagre royalty and earn windfall profits,” the commission has remarked in its report.
It has suggested that the producing firms should be asked to sell their output through e-auction only. The state government has, meanwhile, accepted that it will cap the production from major iron ore mines including Joda at 40 million tonne and Koira mines at 12 MT annually, a top state government official said.
He cited that the state government has served 146 notices to various companies for indulging in over extraction by flouting the mining plans.
Recommending stiff penalties for miners violating green norms under Forest Conservation Act, the commission suggested that violators be imprisoned for six months which could be extended to seven years. Monetary penalties should be imposed on them as well, it said.
The commission said it was disturbing to find that although most mines are located in the tribal-dominated zones, but the tribals have remained a deprived lot.
Unless the miners operating in those zones are mandated to spend half of their profits, their lot would not be improved.
Till recently, the ministry of corporate affairs was toying with a proposal to give non-transferable shares of the mining companies to the eldest woman member of each family living near the iron ore mines.
The panel had earlier submitted its report on Goa in which it has pointed out illegal mining on a similar scale.
Following the panel’s report, the Goa government has closed down operations in about 60 mines within the state.