Naveen fires mining lobby salvo at Centre

Bhubaneswar: Peeved at the Centre`s opinion of the Union minister of mines on the demand of imposition of Mineral Resource Rent Tax (MRRT) on mines owners, chief minister Naveen Patnaik today slammed the Centre and said that its view was influenced by the mining lobby. "The reply of the union minister of state for mines Dinsha Patel is nothing but a version of the mining lobby," Chief Minister Naveen Patnaik said in a statement.

Patnaik`s was reacting after the union mines minister Dinsha Patel literally rejected state government`s demand for imposing MRRT on the mine owners who according to the chief minister were making "super normal profit." Throwing almost a challenge to the Centre Naveen said that the state government has enough data to justify its claim that mines are making abnormally high profit and hence he had written to Prime Minister Manmohan Singh demanding imposition of the MRRT on the line of one being implemented in Australia four months ago in August.

While the state government claimed that the mines owners were making abnormally high profit due to rise in the price of iron ore in the international market, Patel in his letter did not accept it in to. Admitting that the iron ore price has increased from USD 69 per ton in April 2007 to USD 145-150/ton in October 2011, Patel in his letter mentioned that the incidental cost like transportation and handling charges have also increased in the country during the same time.

Therefore, Patel in her January 3 letter had observed that a "closer look" was required by the study group on royalty and dead rent set up recently of which Odisha government was also a member. Patel`s suggestions to Patnaik on availing benefit of the provisions under the MMDR Bill-2011, had also been rejected by the state government. "It is a dilatory tactic to defer collection of additional tax from the super rich miners on the pretext of royalty revision and amendment of the MMDR Act which will take a long time," Naveen remarked.

"If the government of India is serious about benefiting the people of the mining affected area, it should immediately impose the proposed tax instead of buying time and helping the miners to make money everyday," Patnaik said.

Patnaik on December 20 had informed the state assembly that the mines owners were generating supernormal profits or windfall profit which far exceeded the level of investment or the risk involved in the activity. "These vast profit run into thousands of crores of rupees competing even with the annual plan size of Odisha," he observed. Demanding additional tax on the profit made by mines owners, Patnaik said the state should get a share out of it. The state could develop the mining areas and the people who suffer due to mining activities. "The state government cannot be a mere bystander to exploitation of public resources for the benefit of a few," Patnaik had said.