BHUBANESWAR: The profit-making Odisha Mining Corporation (OMC) incurred a loss of `61 crore due to improper costing of bauxite from the Kodingamali block in Koraput and Rayagada districts. This was pointed out by the Comptroller and Auditor General (CAG) in its compliance audit report for the year ending March 2020 which was tabled in the Assembly on Monday.
The State PSU determined the floor price of bauxite for the two e-auctions held in April 4 and October 3 in 2018 and third auction in April 3, 2019 at `462, `547.50 and `672.65 per tonne taking the lift of the mining block to 50 years instead of 21 years. The price finalised after these three e-auctions were `465, `553 and `673 per tonne respectively. The company sold 31,86,277 tonne of bauxite from April 2018 to July 2019.
The Indian Bureau of Mines (IBM) approved mining plan for the lease area holding approximately 611 lakh tonne of bauxite reserves for a period of 21 years, with 15 lakh tonne for first year and 30 lakh tonne per annum for the balance period.
OMC awarded the work for excavation and raising of bauxite to a contractor in September 2017. The agreement between OMC and the contractor said that the raising contractor would be paid 61 per cent of the escalated/de-escalated rate per cubic metre of backfilling (filling of the stope) of the mined-out area.
The PSU included 10 per cent of capital employed in the cost estimates towards interest. It also included the cost of the Sustainable Development Framework (SDF), which was 10 per cent of royalty in the third tender. In such a cost-plus scenario, the estimate for cost of production must have included all the elements of cost - the cost of back-filling, interest on capital employed, SDF among others for raising and sale of bauxite to the aluminium industries.