The Union ministry of mines has turned the heat on the Orissa government over the issue of alleged under-reporting of pit mouth value (PMV) of ore prices by some unscrupulous miners.
Holding the Indian Bureau of Mines (IBM) responsible for its faulty procedures adopted in fixing sale value of iron ore, the state government had earlier sought the intervention of the Union mines ministry in the matter.
The ministry, in turn, has stated that the IBM has been publishing the average sale value based on the PMV which is reported to them by the lease holders. Substantiating its claim, the ministry said the average price of iron ore for all grades for April 2011 for grades that are mostly mined in Orissa compare favourably with the all-India prices.
This in stark contrast to the contention of the state government which had alleged that there was a glaring difference in prices of sale value of iron ore in Orissa compared to that of other states as well as all-India average.
In a recent letter to the state Chief Minister Naveen Patnaik, the Union minister of state for mines Dinsha Patel urged the state government to develop adequate systems to ensure correct reporting by the lease holders by benchmarking the expenses that are allowed to be deducted from the market value of mineral for the purpose of calculating PMV.
“In a recent initiative taken by the Government, Rule 45 of Mineral Conservation and Development Rules-1988 has been amended to allow the state to ensure end-to-end accounting of minerals, where the state government could check the prices at each point of sale to avoid under-reporting or any circular trading. You may like to direct your mining department to harmonize their work-flow processes especially issue of transport permits around this system”, Patel has said in his letter to Patnaik.
The Union minister's letter has come in response to the Chief Minister's letter to him regarding concerns on systematic under-reporting of sale value of iron ore by IBM on which royalty is chargeable on ad-valorem basis.
According to the Union minister's letter, the price of iron ore fines with Fe content of 62-65 per cent in Orissa for April stood at Rs 2,513 per tonne, higher than the all-India average of Rs 2,393 per tonne.
Similarly, the all-India average price of iron ore fines with Fe content of above 65 per cent was Rs 2,769 per tonne for the same period as against Rs 2,513 per tonne for Orissa.
In case of iron ore lumps with Fe content in the range of 62-65 per cent, the price per tonne in Orissa was Rs 4,403 per tonne in Orissa, which is again higher than the pan-India average of Rs 4,110 per tonne.
The Union mines ministry has recently constituted a study group under the chairmanship of the additional secretary.
The study group will make recommendations on the royalty regime under Section 9 of the Mines & Minerals (Development & Regulation) Act-1957.
