CM demands ordinance for imposition of MRR tax
The chief minister`s proposal of imposing MRRT was rejected by the mines ministry last month on the grounds that the cost of production of iron ore and transportation had gone up. The ministry, however, said that the price of iron ore had increased during the past five years in the international market. Patnaik had pleaded that the people living in mine area should also get benefit from the profit.
Quoting the audited financial report of the National Mineral Development Corporation (NMDC) for the last 10 years, he said in his letter "while the sale of iron ore increased from 17.46 million tonnes?in 2001-02 to 26.32 million tonnes in 2011-12, registering a growth of 50.74 per cent, the average income from sale of iron ore leaped from Rs 625.99 mt to a whopping Rs 4287.74 mt, an increase of 585 per cent, during the same period," Patnaik pointed out in the letter to Patel.
The letter was written on January 25, official sources said today. Patnaik said "if we consider the profit till 2003-04 as normal profit, the rates of return since 2004-05 have been much above the normal, indicating that the iron ore companies have been making super normal or excess profits."
The hefty profit was not due to any innovation or investments made by the companies, but for windfall gains owing to increase in the price in global market, he said. With total average cost inclusive of royalty payments at mines remaining well under Rs 1000/mt in 2011, mining companies had made an approximate PBT of Rs 2,500 to Rs 3,000/mt, he said in the letter.