Serajuddin To Pay Rs 6,028 Crore
- 18-Aug-2021
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A demand notice has been served by State Mining Department to the Serajuddin & Co for recovery of Rs 6,028-crore loss to the State exchequer.
The company has taken the Balda Iron Block on lease with high premium in the recently-concluded iron ore auctions and caused Rs 6,028-crore loss to the Government. The Joda Mines Joint Director has directed the company to pay the amount digitally through i3MS gateway along with applicable TCS within 15 days, failing which a certificate case would be initiated to recover the huge revenue.
The Serajuddin & Co, which quoted a high premium 118.5per cent, was granted the mining lease over an area of 343.981 hectares. However, violating Clause-8 and Schedule-D of the agreement of MDPA to maintain minimum despatch of mineral, the company has despatched only 1,39,1898.651 MT of iron ore instead of 85,05,600 MT during the first year lease with a huge shortfall. In view of this, the demand notice has been served to the company to pay the differential amount towards shortfall in despatch vis-a-vis the minimum despatch required under Sub-Rule -1 of 12(A) of MCR 2016. Recently, submitting a petition to the Principal Secretary, Steel & Mines, MASS secretary Subrat Tripathy has urged the Government to recover Rs 2,500 crore in the form of penalty from the auctioned mines which have produced less than the minimum production requirement under their respective MDPAs.
Tripathy demanded that as per action envisaged in the MDPA, the regular offender mines must be cancelled. "Strict vigilance is extremely important when the State contributes more than 55per cent of the country’s iron ore requirement," Tripathy wrote. The Government is losing huge revenue due to shortfall in monthly despatch of iron ore by auctioned mines vis-a-vis minimum despatch requirement as per Rule 12-A of the Mineral Concession Rules.
The State Government has auctioned 21 iron ore mines with about 1,900-million tonne reserves with total EC capacity of about 89 mtpa for continued supply of ore and sustainable revenue generation for the State. All the blocks were won at exorbitant bid premium values making them unviable from the very beginning for some leaseholders. Presently, some lessees are resorting to theft, policy changes, corruption, lower production, etc., until law is changed to ensure that their outflow on premium, royalty, DMF and NMET is considerably reduced.
These factors have led to an acute shortfall in mineral production due to deliberate low production by the lessees. The prices of iron ore have skyrocketed as some miners continue to play with law and the Government machinery.
As per provision, a new lessee is required to maintain such a level of production as to ensure minimum despatch of 80% of the average of the annual production of two immediately preceding years on pro-rata basis, failing which appropriate actions in accordance with respective MDPAs shall be initiated as prescribed under rule 12A(1) of the Mineral Concession Amendment Rules 2020.
The legislation has deliberately used the word ‘pro-rata’ to ensure that the monthly despatch levels are maintained to preexisting levels and artificial scarcity of iron ore is not created in the market. The law clearly had the intent to maintain monthly despatches for sustainable supply of ore with consistent revenue generation for the State. Many lessees are deliberately delaying production for their business interest.
