Monday, October 22, 2007

The Myth - "Central Government controls the mining rights" refrain is a smoke screen- Sandip K. Dasverma

The Myth - "Central Government controls the mining rights" refrain is a smoke screen to protect lots of vested interests.

- Sandip K. Dasverma

It is a myth that Central Govt controls the mining rights? Why else Huda committee's recommendations, are so much opposed by Govt of Orissa, Govt of 36Garh and Govt of Jharkhand? It is a bone of contention, as it will shift the rights to Central Govt., the minining rights authority, which now rests with the states.

The Royalty is fixed by the Center (Govt of India), i.e a few babus of Govt of India, mining ministry. In in absence of any hue and cry from the concerned states or their MPs, the private parties from Jindals to Tatas, and Mittals to Posco call the tune. They are all in this along with the inefficient public sector plants which manages profit at the cost of the Orissa state and other states like it.
For last two years I have been pleading that MPs from Orissa and these other two states get together and demand better than 60% ad valorem International Market price of Iron Ore, as ROYALTY from the Industries. States should not beg Industry to come and to make super profits, while they stay as is. Whose interest they are protecting by becoming silent on this issue? You might as well guess.

Lastly, if we get 60% of International Market price we can give away 10% to any one for making their plant inside the state. And we earn $2 to $4 billion dollars(8000 to 16000 crores at current prices which are likely to go up next year). This we can spend not only to improve health and education but for changing quality of life. We not only give this away but add SEZ and other facilities in the name of competition between the states. For a reference Orissa's current year's budget is Rs. 4500 crores, half the money Orissa GoO is willing to giving away only to POSCO/year for next 30 years.

The three State Govts(Orissa, 36Garh and Jharkhand) can form a Cartel (like OPEC) so they won't have to compete against each other and give away their family silver, so to say.

Please consider why scarce OIL will sell at $80 a barrel every where and scarce IRON Ore at $0.68 C/Tonne, while Brazil and Australia sells it for $100/Tonne.
Also the Iron Ore price differentials, in Ores from lump to fine are all sold in India at the same price in India. Thus a huge wastage and throw away of fines, the less desirable Ore occurs in India.

Who benefits? This Royalty fixed by center argument is a smoke screen to hide that fact that lot of people are unduly benefiting at the cost of the affected states and their people, including Orissa.

Why no such action is being taken?

If it is not happening there must be some vested interest, who must be exposed, is it not?

Let states get together to demand from center:
1. there should be price differential in Ores based on the grade of Ores, from the lump ore, medium and fines.
Fix the Royalty at 50% of the ad valorem International market price for in state Integrated Steel plant(ISP) or Aluminum plants .
Fix the Royalty at 60% of the ad valorem International market price for ISP or Alumina plants located in other states of India.
Fix the Royalty at 75% of the ad valorem International market price for Export.