BHUBANESWAR: The state-run Odisha Mining Corporation (OMC) has paid a staggering Rs 4,364.15 crore as penalty for excess and unauthorised mineral production, raising serious concerns over compliance with statutory regulations and internal controls.
The penalties were imposed for violation of environmental and mining laws, including the Environment Protection Act, Forest Conservation Act and provisions governing mining plans and clearances. The issue assumes significance in light of the Supreme Court’s August 2017 judgement which categorically held that any mining activity carried out in violation of statutory requirements is illegal, and minerals extracted under such conditions are deemed illegally mined.
According to the performance audit findings of OMC by the Comptroller and Auditor General (CAG) for the period ended March 2023, 14 of its 18 operative mines produced 29.47 million tonnes (MT) of minerals, during 2000-11, either beyond environmental clearance (EC) limits or without forest clearance (FC). This led to a penalty of Rs 3,761.88 crore, paid by OMC between 2017 and 2022 to the state Steel and Mines department. Delays in payment resulted in additional interest liabilities of Rs 2.67 crore.
A major portion of the penalty i.e., Rs 1,666.76 crore was linked to excess production of 5.40 MT of chromite from Sukrangi and South Kaliapani mines. The payments were delayed by nearly four years, exposing OMC to a potential interest burden of around Rs 898.23 crore, though the demand for this has not yet been raised by the state government.
Further irregularities were flagged in eight mines, including Daitari, Gandhamardan and Dubuna, where 5.56 MT of minerals were produced beyond permitted limits under consent to operate (CTO) and approved mining plans. This resulted in an additional fine of Rs 602.27 crore, along with Rs 91.34 crore in interest due to delayed payments.
The report also pointed at fresh instances of non-compliance during 2018-19, which could further cost OMC Rs 1,328.37 crore. In Sukrangi, excess chromite production beyond EC limits could attract a penalty of Rs 29.98 crore. In Kodingamali, bauxite extraction exceeding CTO limits may lead to a massive Rs 1,298.39 crore in fines.