BHUBANESWAR: The government on Thursday informed the Assembly that audit findings have pointed to a revenue loss of Rs 4,162.79 crore due to undervaluation of iron ore even as the state has initiated stricter monitoring mechanisms to curb grade misreporting and illegal mineral dispatch.
Replying to a question from BJD MLA Ranendra Pratap Swain, Steel and Mines minister Bibhuti Bhushan Jena said instances of “drop in grade” had been detected in several iron ore and manganese blocks, leading to differential royalty demands running into hundreds of crores.
According to official data tabled in the House, major cases were reported from the Koira and Joda mining circles during 2022-23. Companies including JSW Steel, Yazdani Steel & Power and Patnaik Minerals were asked to pay differential dues after committee findings indicated under-reporting of ore grades. The total differential demand across five identified cases stands at around Rs 579.72 crore.
However, the minister said that no payments have been realised so far in these cases with leaseholders either seeking legal recourse or obtaining stay orders from the Revisional Authority in the Ministry of Steel and Mines, which has restrained coercive action pending submission of the state government’s comments.
Jena acknowledged audit observations and allegations that certain mining operators misclassified high-grade minerals as low-grade to evade royalty and statutory payments. Citing the Comptroller and Auditor General (CAG) report for the year ended March 2022, he said the state suffered a revenue loss of Rs 4,162.79 crore during 2020-21 and 2021-22 due to undervaluation of iron ore transported through key corridors such as Joda-Koida-Jajpur.
The largest share of the estimated loss was linked to Jajang iron ore mines (Rs 2,877.27 crore), followed by Jaribahal (Rs 703.66 crore), Roida-II blocks (Rs 215.27 crore), Gonua (Rs 185.15 crore), Nuagaon block (Rs 153.79 crore) and Thakurani iron ore mines (Rs 27.65 crore).
However, subsequent inspections by a state-level enforcement squad, which involved sampling and laboratory analysis of mine bench faces, did not find “substantial grade misclassification, the minister added.
To address systemic gaps, Jena said that the state has notified the Odisha Mineral (Prevention of Theft, Smuggling and Illegal Mining and Regulation of Possession, Storage, Trading and Transportation) Rules, 2025.
The framework stipulates mandatory third-party sampling, automated grade analysis and AI-driven real-time monitoring of mineral dispatch. These measures are aimed at enhancing transparency, curbing illegal mining and preventing revenue leakage in the mining sector, he said.