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Mines ministry raises red flag over rising low-grade Manganese ore in Odisha
The Union mining ministry raised suspicion that these mining lease holders are dispatching the high-grade ore to traders in West Bengal as low grade ore
The Union ministry of mines has asked the Odisha government to inquire into the drastic reduction in grade of Manganese ores in at least four mines that were auctioned, raising suspicion that these mining lease holders are dispatching the high-grade ore to traders in West Bengal as low grade ore.
Quoting the reports of the Indian Bureau of Mines (IBM), a senior official from the mines ministry in a letter to the principal secretary of steel and mines department this month, alleged that these leaseholders of Manganese ore are dispatching Manganese ore allegedly as low-grade from their mines located in Odisha to the traders operating from West Bengal, who subsequently sell it as high-grade ore without any processing.
“IBM in its letter to this Ministry had highlighted under-reporting of grades in auctioned manganese ore mines in Odisha wherein it was observed that in four mines out of the 7 auctioned mines which were analysed, the share of low-grade Manganese ore had increased from 0% in 2019- 2020 to 65% to 100 % in financial year 2021-2022. Auctioned manganese mines where such drastic change in grade of manganese ore has been reported, such as Kanther-Koira, Katasahi, Kolmong & Mahulsukha mines, may also be examined by the State government,” the letter said.
As per the latest estimate of IBM, Odisha has 96.12% of country’s Chrome ore, 51.15% Bauxite reserve of India, 33.61% of Hematite iron ore and 43.64% of manganese. Manganese ore containing 25% Mn content and below is considered to be low grade and are generally priced much lower. Auctions are finalised and mines are leased out on the basis of highest bid premium per tonne of ore offered by the private bidders. The price of ore with less than 25% Manganese content is ₹3,228 while the same for ore containing Manganese content over 46 % is ₹20,407. If the Manganese ore is low grade, the leaseholders pay lesser royalty to the National Mineral Exploration Trust and District Mineral Fund.
The mines leaseholders in the Silijora Kalimati area are AMCD Transport & Mineral Pvt Ltd, Barbil Mining & Industries Pvt Ltd, Kashvi Power & Steel Pvt Ltd, Modern India Concast Ltd and Thakur Prasad Sao and Sons Pvt Ltd. Before auction, the low-grade Manganese ore ranged between 4.86% to 40% which went up to 98% in the same mines during extraction in last two years.
As per Section 23C of the Mines and Minerals (Development and Regulation) Act, state governments are empowered to make rules for preventing illegal mining, transportation and storage of minerals. It is the responsibility of the state government to establish the correct grade of material being dispatched and charge auction premium, royalty and other payments. As per ule 45(7)(b) and (c) of the Mineral Conservation and Development Rules (MCDR), 2017, the state government can suspend licence / permit in case it is found that the person or the company engaged in trading or storage or end-use submits incomplete or false information in monthly or annual returns – the trading companies have managed to go with impunity without submitting any timely returns.
The mines ministry in its letter said though it has previously highlighted the under-reporting of grades of iron ore and Chromite ore last year in Odisha mines and requested to develop standard operating procedure (SOPs) for preventing loss of revenue due to declaration of higher grade as low grades with lower ex-mines prices and to ensure compliance of the SOPs, the state government is yet to act upon it.
State steel and mines secretary and director of mines refused to comment on the letter of the Union ministry.
Bharatiya Janata Party (BJP) member of Parliament (MP) Aparajita Sarangi, who had earlier highlighted the under-reporting of grade of Iron and Chromite ore, said the investigation done by the IBM clearly indicates an effort to reduce the average sale price by showing a much higher percentage of production of low grade ore.
“There is loss of thousand of crore to the State exchequer by deliberately downgrading the quality of ore being produced in many of the auctioned mines. This cannot happen without the connivance of the state government and its machinery,” she alleged.
