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Central Empowered Committee (CEC) team starts inquiry into Sarada Mines, JSPL nexus

Thursday, 6 March 2014 - 6:00am IST | Place: Bhubaneswar | Agency: dna

A three-member team of the Supreme Court-appointed Central Empowered Committee (CEC) began its inquiry into alleged irregularities committed at the Thakurani Iron Ore mines at Barbil in Keonjhar district of Odisha.

The sole beneficiary of these alleged irregularities is Jindal Steel and Power Ltd (JSPL). The lessee of this mine is Sarada Mines.

The CEC team, led by its chairman P V Jayakrishnan and consisting of member secretary M K Jiwrajka and member Mahendra Vyas, is on a four-day visit to Odisha to inquire about the violation in Mineral Concession Rules (MCR) 1960. It is alleged that the lessee has violated the provisions enshrined in the rule 37 of the MCR.

It is alleged that Sarada Mines, the lessee holding the Thakurani mines, was selling its entire run of mine produce to JSPL without any written agreement. The lessee also allegedly sold its iron ore at unacceptably low rates than the market prices, causing a huge loss to the exchequer. The case was referred to the CEC by the apex court in its order dated September 16, 2013.

The Odisha government had served a notice to the lessee for the statutory violation after an inquiry report of the state government revealed that the major benefit of the mine was flowing to JSPL. The present arrangement of selling entire run of mines produce to JSPL by Sarada Mines amounts to transferring the lease holder's interest in the mine to the steel company, as per provisions of Rule 37 of MCR-1960, the report said.

The arrangement also contributed to lower value-added tax collection by the state government on account of low pricing of ore by the lessee compared to market prices. The Justice M B Shah Commission of inquiry during its visit to Odisha had also found many irregularities in the operations of Thakurani mines spread over 947 hectares of Thakurani reserved forest.

The CEC on Wednesday visited the Thakurani mines area and met some officials of Sarada Mines, office of the Deputy Director of Mines and local transport operators. The CEC team also accepted memoranda from some social activists about illegalities committed in this mine. The team will also hold talks with top state officials on setting up of a special purpose vehicle for periphery development of mines area.

The CEC had recommended that 50% of the additional Net Present Value collected from mining leaseholders is to be utilised for inclusive growth and development in villages, gram panchayats and peripheral areas affected by excavation of minerals.

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