Bhubaneswar: Odisha sees recovery in its mining sector as mineral dispatch in the first 6 months of the financial year goes up by 19% against the H1 of the previous fiscal. However, the rise in mineral dispatch has not transformed into higher mineral royalty income for the state, thanks to delay in notifying the average sale price by IBM and non revision of royalty by the central government.
The latest report by the Directorate of Mines reveals that in comparison to 2012-13, dispatch of Iron ore lumps and fines has increased during April-June and July – September quarters. By end of September this year 34.90 MnT Iron ore lumps and fines were dispatched, while it was 29.10 MnT during corresponding period of last year, a rise of 19%.
However, fall in price of ore and delay in notifying the average sale price by IBM has resulted in less income on royalty front.
“There is a significant fall in the average sale price of Iron ore lumps and fines in the market, which has substantially affected the royalty generated for the state in spite of increase in dispatch” said senior officials in Directorate of Mines.
While the State Government has set a target of Rs.80,000 million collections on Non Tax Revenue, expectation from Mining Sector is Rs.60,000 million. And till end of September 2013 mining revenue collected is Rs.25,790 million as against the target of Rs.27,500 million.
Officials say that mining royalty is assessed on the basis of average sale price of Iron ore lumps and fines published by IBM on monthly basis. And till date IBM has only published the average sale price for the month of April.
So royalty was collected during these six months on the basis of the price of April published by IBM. IBM needs to do the price fixation on regular basis as it takes into account the market price fetched by to 10 non-captive producers and workout average sale price, said the official.
It is observed that there is wide variation of the market price so considered by IBM for any particular grade of iron pore lumps and fines. Over and above this delay of IBM, the Union Government is also delaying the revision of rate of royalty, which is overdue so that it will help in improving mining revenue for the state, said the official.
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