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Monday, December 26, 2011

Orissa likely to go Bellary way

Monday, 26 Dec 2011

ET reported that Karnataka scenario may now be repeated in Orissa, which produces a third of the country's iron ore and where a state government team is investigating cases of mining contractors taking out and shipping ore illegally.

The culprit in both cases seems to be the abuse of 'raising contracts', agreements between mine owners and operators permitting an individual or a group of individuals owning a mine to outsource the extraction and sale of ore to a third party with expertise.

A pattern similar to Karnataka has been now noted by Orissa officials in the state. Rule 37 of the Mineral Concessions Rules, 1968, permit raising contracts but without the transfer of ownership and financial control of the mine. But in Keonjhar and other districts of Orissa, that is exactly what seems to have happened. The state government suspects some contractors took over mines and shared profits with the original lease holder.

A senior Orissa official of the mines ministry told ET recently that "Our team has submitted a report on eight such mines which we are studying. We have sent notices to three miners and will be auditing some more.”

Eight more are to be scrutinized for similar violations.

One of Keonjhar's older miners said that “It suits lease holders who have been living far from the mines. They could make money without lifting a finger.”

The Justice Shah Commission, which is examining the illegalities in iron ore and manganese mining across the country, also visited some of these mines during its recent trip to the Joda-Barbil area in Keonjhar. The Shah Commission officials specifically wanted to know the nature of the mine's arrangement with the contractor and the question of control.

(Sourced from ET)

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