Probe panel puts Orissa's illegal iron ore mining at RS60,000 cr

The Justice MB Shah Commission set up by the Supreme Court has estimated the size of illegal iron ore mining in Orissa at Rs60,000 crore and has recommended a ban on export of iron ore from the state in order to disincentivise such illegal mining of the ore.

Ninety-four of the 192 iron ore mining leases in Odisha do not have the mandatory environmental clearances, while of the 96 that have them, 75 have mined far beyond their permitted levels over the past several years, says the commission.

The commission set up under a Supreme Court order in 2012 has demanded a CBI probe into these illegal mining.

The report, presented by the commission, however, lets off large mining companies such as Tata Steel, Essel Mining (Birla group) and SAIL from any fresh probe. The commission has not found any evidence of illegal mining by these companies but it has pointed to over extraction from the mines by these companies.

The Naveen Patnaik-led state government, however, has ruled out any probe by the CBI saying the state machinery can handle illegal mining cases. The Shah Commission has insisted that the CBI should also probe into the FIRs filed by the state police.

Meanwhile, export of iron ore from Orissa has dipped to 4.34 million tonnes in FY 13, down from 10.01 in the year before, amidst a fall in demand from China.

These illegal mines also produce false excise certificates to claim a lower freight rates from the Railways, deriving double benefits, the commission pointed out in its report recently submitted to the mines ministry.

The Railways charge lower rates for domestic transport of ore compared with exports.

The miners used the lower charges to earn about Rs1,900 crore in six years while exporting the ore too. The Railways has informed the commission that it has detected such evasion cases against 14 companies and have issued them notices to recover an amount of Rs1,874 crore.

The scale of evasion is particularly high in south eastern railways zone.

The report by the commission is likely to be discussed by the Union Cabinet today before tabling in Parliament.