Share iron ore mining profits with communities: Patnaik

Noting that the unprecedented boom in iron ore prices is generating supernormal profits, the Odisha Chief Minister Naveen Patnaik, has asked the prime minister that the profits should be shared with the community as well.

In a letter to Manmohan Singh, Patnaik also called for revising the royalty on minerals.

“The super normal profits being made are evident from the audited operational profits of 80 per cent of sales revenue from iron ore mining, which is unheard of in any other industry,” the chief minister stated in the letter dated August 30. This has led to a situation where in spite of the state being the owner of these resources, the mine owners are benefiting beyond measure of reasonable returns, he added.

While seeking fair share in the profits, Patnaik invoked article 39 (b) and (c) of the Indian Constitution that entails equity in society through a better distribution and control of the material resources of the community.

Citing the example of Australian government, which recently announced a Mineral Resource Rent Tax of 30 per cent, Patnaik urged the PM to increase the tax to 50 per cent of the surplus profit accumulated by the companies. Presently, the rate of royalty on iron ore is only 10 per cent of the sale value determined by Indian Bureau of Mines (IBM).

Meanwhile, the state has formed a 14-member committee to regulate the extraction of iron ore from two iron-ore rich belts in Joda in Keonjhar and Koira in Sundargarh district of the state. The Odisha Department of Mines and Steel reasoned that due to increase in production and transportation of iron ore from these regions, the environment and communities are affected. “It is necessary to develop a master plan for the areas to ensure that the cumulative effect of extraction from individual mines is within sustainable limits,” read a notification by the department on September 16.

The committee consists of officials of the transportation department including railways, mining, state pollution control board and the forest department of the state. Besides the 14 specified members, the committee may invite two mining lessees and two end-users to attend the meetings of the committee. Earlier, a probe panel’s report in the state had revealed that 104 miners had produced iron ore, manganese ore and limestone in excess of the quantity specified by Indian Bureau of Mines.