Monday 10 December 2018

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Economy | Mining

Is BJP Govt e-auctioning remaining ore by causing loss of over Rs 150 Cr?

 

Is the BJP government conspiring to a-auction the remaining ore in its possession at peanuts for the benefit of mining lobby by accruing huge loss of over Rs 150 crore to the state exchequer?

It appears so because a proposal is presently pending before the government to slash the e-auction price to Rs 350 from Rs 500 per metric tonne to sell the remaining ore of 80 lakh metric tonnes.

Contrary to the claim that bidders are not coming forward to bid because of a high price, mining department records on the website show that the last bid in December 2015 was auctioned for the price of Rs 511.

This was the highest quantity of ore auctioned, nearly 12 lakh MT, compared to eight more bids held in 2015.

In fact records show that the e-auction held in October 2015 was priced at Rs 951 per metric tonne – nearly double than the base price - while September bids were in the range of Rs 647 to Rs 742.

The table attached with the news shows the price at which 14 e-auctions held so far were bid, from February 2014 to December 2015.

Though auctioned at varied price, the average price of the 86 lakh MT of ore bid so far has been Rs 1053 per MT.

What remains in the government’s possession is equivalent quantity of ore – 80 lakh MT, for which the state government has to pay the processing fee of Rs 200 crore to the lease holders @ Rs 250 per MT, as per the Supreme Court order.

State-owned ore e-auctioned (2014-15) 

No Period Quantity Sale Value Rs Price/MT
1 Feb '14 588705 1026921530 1744
2 May '14 1074927 1670220740 1554
3 Dec '14 553188 775695930 1402
4 Oct '14 1936410 2378376050 1228
5 Nov '14 1053962 866021000 822
6 May '15 439930 348234200 792
7 Apr '15 55450 70728000 1276
8 Aug '15 211670 15,13,39,700 715
9 Oct '15 346970 33,00,89,700 951
10 Sept '15 178610 11,56,15,600 647
11 Sept '15 4,17,290 30,98,14,350 742
12 Sept '15 1,86,400 12,33,45,400 662
13 Apr '15 205690 103484900 503
14 Dec '15 1172760 599442400 511
    84,21,962 8,86,93,29,500 1053

 

If this ore is auctioned at the base price of Rs 500, the state would get direct revenue of Rs 200 crore after paying the processing fee of Rs 200 crore.

However, in the budget, Chief Minister Laxmikant Parsekar has shown revenue figure of only Rs 40 crore – almost Rs 160 crore less – calculating the base price of bid @ Rs 300 crore per MT.

It means Parsekar has already made up his mind to slash down the bidding price much before a formal decision is taken in this regard.

“I have not made up my mind. But I am wondering what to do since bidders are not coming forward”, Parsekar told goanews.com.

While putting forward the proposal of Rs 350, mines department has argued that what remains now is the unprocessed ore while good quality ore has been exhausted in the last 14 bids.

The website tables however show that 51 to 60 grade of ore was bid for Rs 500 in December, most of which was lifted by Vedanta from its own leasing property that was declared illegal.

The remaining 80 lakh MT of ore also shows ore graded by the mining department between 34 to 63 grades.

However, most of this ore is above 50 grade, which the bidders would lift at a slashed price, causing a loss of not less than Rs 160 crore to the state treasury. 






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