Iron ore mining declines in Odisha

4th June 2018

The Statesman reported that iron ore mining has witnessed a decline in Odisha, following the Supreme Court’s direction to the miners for a payment of compensation of INR 17,576 crore for exceeding output beyond the quantum fixed under the environmental clearances, the ASSOCHAM said while seeking the central government intervention to resolve issues as a large number of jobs are at stake.

The chamber said in its letter to the Union Mines Ministry that “The ASSOCHAM would like to request for your kind intervention to take up the matter with State Government of Odisha and impress upon them to take correct legal position on the concern of miners in Odisha.”

In February 2014, a writ petition was filed in the Supreme Court, alleging illegal mining activities in Odisha. The apex court had directed in May, 2014 the Odisha Government to suspend operations of 102 mining lessees with a liberty given to the lessees to apply for resumption of mining operations by providing all the statutory clearances.

Supreme Court has directed the defaulting Iron Ore Mining lease holders to deposit the compensation for production of minerals in excess of environmental clearance.

This compensation adds to INR 17,575.99 crore, beyond the paying capacity of the miners. The ASSOCHAM stated in its letter to the Mines ministry that “Post the judgment, there has been a visible decline in the production of iron ore as the mining operations of a lot of lessees who were unable to pay the compensation by 31 December, 2017 were suspended. The mining lessees have been struggling hard to pay the compensation amount and the closing down of mining operations have further increased the troubles of the mining lease holders.”

It said, while most of the operating mines have deposited the compensation, the mine owners whose mines were closed back in 2014, four years ago, have been struggling to arrange the required way to pay the compensation.

The banks are not willing to lend the credit making the situation for these lease holders even worse. Due to closure of mining operations, there has been a sharp decline in the production of mineral, thus, escalating the prices of iron ore.

Since August, 2017, prices of fines (+) 62.5 % Fe went up from INR 1127/tonne to Rs 2050/tonne and those of Lump from INR 2348/tonne to INR 3915/tonne. This exorbitant hike in prices has severely hit the Industries making them globally uncompetitive.

The chamber said the mining industry provides over direct employment to 60,000 persons and indirect employment to over one lakh persons in ancillary activities like transportation, human resourcing, marketing and various other downstream activities in Odisha.

The industry has also developed the surrounding areas, built schools, colleges, hospitals etc. for the local populace. ASSOCHAM said that “It is this very mining industry that provided lucrative opportunities to various downstream activities, thus generating employment and stimulating development and economic growth. In light of the recent developments stated herein, however, the people of Odisha have become the major sufferers due to unemployment and loss of opportunities in the allied downstream activities.”

Odisha is among the richest mineral bearing states of the country and the mineral reserves here constitute 33 % Iron ore, 24 % coal, 59 % Bauxite and 98 % Chromite of India’s total deposits and therefore, it contributes to a large part of raw materials for the mineral based industry not in only in Odisha but in the entire country, it noted.

Source: THE STATESMAN