Mining Corruption in Odisha [UPSC Notes]

The Indian Bureau of Mines (IBM) has alerted the Ministry of Steel and Mines about the illegal transportation of Manganese ore in Odisha. Know more about this development in detail in this article. This topic is relevant for the IAS exam current affairs and governance segments.

Mining Corruption in Odisha

According to the IBM, mining lease holders in Odisha are dispatching low-grade Manganese ore from their mines to traders in West Bengal who sell it as high-grade without any processing. This has resulted in a significant loss of revenue. 

• The Siljora Kalimati Iron and Manganese ore mines were investigated by the bureau. 
• In November 2022, the Ministry warned the Odisha Government about under-reporting the grades of chromite and manganese ores. 
• The Ministry recommended the State Government establish a Standard Operating Procedure to prevent revenue losses due to the declaration of higher-grade ores as lower-grade.

Serious loss to the State exchequer due to under-reporting of grades of minerals:

• The Ministry has said that when the grades of minerals are under-reported, it leads to a loss of revenue for the State. 
• This happens because the collection of payments such as auction premium, royalty, district mineral foundation funds, and national mineral foundation trust is based on the grade of the mineral being extracted.
• Section 23C of the MMDR Act empowers State Governments to make regulations to prevent illegal mining, transportation, and storage of minerals.
• Therefore, it is the responsibility of the State Governments to ensure that the correct grade of mineral being dispatched is determined so that the right amount of auction premium, royalty, and other payments can be collected.

Past allegations of irregularities in mineral-rich Odisha:

• Odisha is a state in India that is rich in minerals such as chrome ore, bauxite reserve, hematite iron ore, and manganese. 
• In the past, the state government had faced criticism from the opposition for irregularities in the mineral sector, resulting in significant losses. 
• The M.B. Shah Commission estimated the extent of such irregularities to be around ₹59,000 crores. 

Loss of thousands of crore to the State exchequer:

• Bhubaneswar MP Aparajita Sarangi has alleged that IBM’s investigation indicates a loss of thousands of crores to the state exchequer due to deliberately downgrading the quality of ore produced in several auctioned mines. 
• Sarangi believes that the state government and its machinery might be involved in the issue. 
• There is currently no standard operating procedure in place to prevent the theft of minerals by downgrading the quality of the ore. 
• This has led to significant losses for the state exchequer, as seen in the case of Siljora Kalimati Iron and Manganese ore mines where low-grade manganese ore was auctioned, but then upgraded to much higher grades before being sold.
• Ms. Sarangi accused the State Government of ignoring corruption in iron ore, chrome ore, and manganese mining, despite the Ministry of Mines’ efforts.
• She claimed that no standard operating procedure has been developed to prevent ore downgrading and theft.
• Instead of cancelling the lease, the State Government has given mine owners a chance to obtain a stay order from the High Court or the Mines Tribunal by raising a demand.

Mining Corruption in Odisha [UPSC Notes]:- Download PDF Here