Joda: Mines are the principal source of revenue for the state government. However, the state government is facing loss due to the faulty valuation of the mines by the Centre-owned Indian Bureau of Mines (IBM), the report said Wednesday. A review said though production is increasing from these mines, their share of revenue to the state exchequer is not rising correspondingly.
Sources said the state government received Rs 50,000 crore as mineral revenue in 2021-22 FY while the revenue share dropped to Rs 37,000 crore in 2022-23 FY. The drop in revenue share came when 20 lakh MT mineral was dispatched or transported in excess from Joda mineral division in Keonjhar district. The revenue share witnessed a sharp decline despite excess mineral transportation from Joda mining division. The mining revenue is fixed on the basis of the total revenue produced and its price from the mines in the state. IBM is fixing the mineral revenue on the basis of Mineral Concessions and Development Rules (MCDR)- 2017. The price of the minerals produced from various mines is not equal. The average sales price (ASP) is decided by IBM which is stated to be the reason behind the declining revenue share of the state government.
Currently, out of 94 mines under the Joda division, 31 are in operation while 57 are lying closed. Six mines have received temporary dispatch orders. The state government earned Rs 25,000 crore as revenue from sale of 71 million MT of minerals under Joda mining division in 2021-22 FY. The revenue declined by Rs 9,000 crore from earlier Rs 25,000 crore despite selling 72 million MT minerals in 2022-23 FY. This is because IBM has not fixed the price of large blocks of iron ores or iron ore lumps for which various mining firms are converting the large blocks of iron ores or iron ore lumps to calibrated ores by crushing the iron ore lumps and selling at Rs 7000 per tonne.
This started in April 2022 while the price of iron ore lumps was Rs 9,200 per tonne before 2022. The change in price has led to a decline in revenue share. The decline in revenue share has led to a decline in contribution to the District Mineral Foundation (DMF) and National Mineral Expo Ration Trust (NMET). Moreover, the decline in revenue share is also affecting the premium money paid to the state government by the leaseholders.
As a result, the contribution of the DMF collected for the mineral-bearing areas is also declining. Funds worth Rs 1,805 crore were collected for the DMF in 2021-22 FY while it was reduced to Rs 1,300 crore in 2022-23 fiscal.
Similarly, Rs 780 crore has been collected so far in 2023-24 FY. When contacted, mining expert Jyoti Ranjan Rout said a new mining policy was formulated after 2020 and the auction of mines was launched. The mining policy came into force in 2020 but the MCDR rules remained unchanged. This has proved to be a stumbling block in revenue collection. Revenue collection will rise only if the Odisha Mining Corporation fixes the average sale price (ASP) of iron ores and sells off the extracted minerals through auctions. The state Mining department and the Centre-owned IBM should coordinate and amend the MCDR rules-2017 which will help boost revenue collection and keep the interest of the state government protected, he added.