Despite ban on exports, state’s royalty rises 36 per cent in 2010-11.
The illegal export of iron ore from Karnataka amounted to 30.68 million tonnes over a period of seven years (2003 and 2010). This is a third of India’s annual exports.
According to an affidavit filed by Chief Secretary S V Ranganath before the Supreme Court last week: “Despite efforts by the government for several years, it is seen that iron ore is being mined and transported without valid permits. Iron ore exported has been generally more than the valid permits issued by the state government.”
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As against the permits issued for export of 46.84 million tonnes during the seven-year period, the state exported 77.53 million tonnes of iron ore, the government admitted in its affidavit.
The Central Empowered Committee (CEC), appointed by the Supreme Court to investigate into the illegal mining activities in Bellary-Hospet and Sandur regions in north Karnataka, stated, “At the present rate of mining, state will be exhausted of iron ore in about 20 years.”
If figures of illegal mining are added, which are substantial, the resources will get exhausted in a much shorter period and raises serious question of intergeneration equity, CEC said.
In the last 10 years, Karnataka has witnessed a substantial increase in the mining of iron ore. This has been driven by the large demand for export of iron ore. Despite efforts by the government for several years, it is seen that iron ore is being mined and transported without valid permits. The iron ore exported has been generally more than the valid permits issued by government of Karnataka.
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About 165 registered dealers purchased 6.4 million tonnes of iron ore valued at Rs 644 crore from unregistered dealers between 2005-06 to 2009-10 in the four districts of Bellary, Hospet, Koppal and Chitradurga.
“The government will take all necessary action to recover this amount and another Rs 60 crore as royalty,” the affidavit said.
Apart from taking steps to curb illegal mining, the government has also initiated steps to recover the money from traders, stockyards and owners of beneficiation plants. These people or companies have shown the illegally traded/used iron ore as Unregistered Dealer (URD) purchases in Form Vat 100.
This amounts to dealing of minerals with non-registered or unlicensed mineral dealers and is a clear violation of the provisions of MM (D&R) Act, 1957. Hence, the Director of Mines and Geology has initiated action for the recovery of value and royalty over this illegally transacted iron ore.
Meanwhile, during 2010-11, the royalty revenue of the state government from iron ore has gone up 36 per cent to Rs 435 crore, despite the ban on the export of iron ore for almost eight months of the last financial year.
Though the exact production of iron ore during FY11 is not available, the state dispatched 33.75 million tonnes, of which 7.4 million tonnes were exported.
“The royalty amount is collected by the government irrespective of export of iron ore. Most companies conducted mining during the export ban and transported to domestic steel companies. When the ore is mined and transported, the mining companies will have to pay us the royalty,” a senior official in the Department of Mines and Geology told Business Standard.
The royalty amount for state government would have been much higher if there was no ban on exports last year, he noted.