The Shah Commission has asked Jindal Steel & Power Ltd (JSPL) and Sarada Mines to submit relevant information on violation of Rule-37 of Mineral Concession Rules-1960 by November 11.
The probe panel has sought information on whether environment clearance was available for conveyor belt of Sarada Mines’ Thakurani iron ore mine lease, the quantum of ore despatched to JSPL's end-use plant at Raigharh and if ore extracted from the mine was put to any other use.
The panel members have scrutinized records of the steel maker as well as the lessee.
“The commission had received allegations regarding violation of Rule-37 of Mineral Concession Rules-1960. Accordingly, we checked records of JSPL and Sarada Mines and took views of their officials,” said U V Singh, team leader of the panel. JSPL officials could not be reached for comments on the matter.
Earlier, a five-member committee of the state steel & mines department had found the lessee guilty of violating Rule-37 of Mineral Concession Rules (MCR)-1960. The lessee which holds the Thakurani iron ore mines spread over 947.04 hectares in Keonjhar district has been found to sell its entire run of mine (ROM) produce to JSPL without any agreement.
According to the committee's report, the major benefit of the mine is flowing to JSPL. Moreover, the present arrangement of selling ROM to JSPL by Sarada Mines amounts to transferring the interest in the mining lease to the steel company, the report added.
The arrangement apart from being in violation of provisions of Rule-37 of MCR-1960 also contributes to lower value added tax (VAT) collection by the Odisha government on account of low pricing of ROM in comparison to the value derived by JSPL from the product vis-a-vis the market price.
ROM was sold by Sarada Mines to JSPL at the average rate of Rs 400 per tonne during 2008-09. The ROM is converted by JSPL into products including calibrated ore having much higher market value. The low pricing is also evident when compared to market value of the products sold by other lessees. For instance, Mid East Integrated Steel Ltd paid at the rate of Rs 3,350 per tonne and Rs 4,000 per tonne for calibrated lump ore procured from M B Ispat Corporation and Shiv Shakti Steel Pvt Ltd respectively.
Besides, Sarada Mines has also allowed the steel maker to install two crusher units having capacity of 1,000 tonnes per hectare (tph) and 3000 tph within the leasehold area. The enquiry report points out that there is lack of clarity regarding permission for installation of the two crusher units inside the leasehold area by the competent authority.
