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dna special: Firms get stay on Rs60,ooo crore in fines

Tuesday, 28 January 2014 - 6:15am IST Updated: Tuesday, 28 January 2014 - 1:15am IST | Place: New Delhi | Agency: DNA
Odisha govt had asked companies to pay for excess production of ore.

Even when the Supreme Court is turning heat on the central government for tabling the recent controversial MB Shah Commission report in the court, top corporate groups named in the Commission report for illegal mining have managed to get a stay on a Rs60,000 crore recovery slapped on them by the Odisha government.
The Shah Commission had listed a number of corporate groups, including Jindal Steel and Power Ltd, Tata Steel, Essel Mines and Rungta Mines for excess production of iron ore and manganese ore. The Odisha government had issued show-cause notices to recover Rs60,000 crore from these companies in June-July last year.
Tata Steel was asked to pay a total of Rs2,981 crore for illegal mining. Jindal was supposed to pay Rs31 crore and its subsidiary Sarda was supposed to cough up Rs284 crore. And even SAIL was sent a recovery notice of Rs3,990 crore for excess production.
A mining tribunal, however, granted these companies a stay on recovery notices.
Manoranjan Mishra, joint director (mines) Orissa government told dna, “Almost all the companies have managed to get a stay on the Orissa government notice from the tribunal. Demand notices were issued to them in June –July last year, after which they approached the ministry. The tribunal has ruled in the favour of the stay saying that no coercive action be taken till the time their petition is disposed.”  
Replying to an email sent by dna for a response on the matter, JSPL said, “It may be noted that a demand notice of approximately Rs31 crore was issued by the deputy director of mines — Koira. The same was challenged by JSPL before the mining tribunal. The mining tribunal has stayed the demand.”
A SAIL spokesperson said the company has done all mining with statutory clearances in place. Tata Steel did not respond to dna queries.  
So, while the rampant illegality continues, the central government has contended that it will submit the report in ‘sealed envelope’ to the Supreme Court only after it tables the report in parliament. The Shah Commission’s report discusses in details the profit maximisation by corporates on account of illegal mining and political-corporate-administration nexus. It does not give a clean chit to the Orissa government either.
Explaining the profit maximisation maths by the corporate entities, the report says, “The average value of the high iron content lumps was Rs5,189/MT. With total costs inclusive of royalty payments at mines remaining well under Rs1,000/MT in 2011 on an average, the mining companies would have made approximate profit before tax per tonne of iron ore ranging from at least Rs2,500/ to Rs 3,000/MT.”
Taking a dig at the young entrepreneurs, the report said, “Based on the facts gathered and analysis to them highlight a complete disregard and contempt for the law and lawful authorities on the part of many among the emerging breed of entrepreneurs, taking undue advantage of natural non-renewable assets for export earnings.”
Indicting the Orissa government, under whose nose the illegal activities had been happening since 2000, the commission said the case of illegal mining was filed just before the visit of the commission to the Odisha state.


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