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Bijay Ray, the General manager of Orissa Manganise and Minerals Company, was arrested following raids conducted on the company premises the Koida area of the district and seizure of about 18,000 tonnes of iron ore, it said.
He would be produced in a court shortly.
The crackdown on illegal mining units has been conducted for the last four months by the Rourkela police in the iron ore and manganese-rich Koida mining division.