MAC: Mines and Communities

Mining Activities Face Bureaucratic Red-tapism

Published by MAC on 2006-03-02
Source: Himanshu Bhayani / Mumbai/ Porbandar / T ()

Mining activities face bureaucratic red-tapism

by Himanshu Bhayani / Mumbai/ Porbandar / The Business Standard

2nd March 2006

The bureaucratic hurdles has hampered the growth of mining activities of over 350 mines in Porbandar district, which has an annual turnover of Rs 169 crore.
The government, despite earning royalty money of Rs 27.32 crore, has not softened the procedures and policies for issuing mining leases. This has encouraged the operators to opt for illegal mining activities, inviting more mafias in mines trade.
There is an ongoing war among the gangs led by Sarman Munja, Santok Jadeja and Bhima Dula Odedara to acquire the natural resources, which is stretched up to 90 sq km from Varvala village of Porbandar up to Bhatia in Jamnagar.
Bauxite, Limestone and Chalk are available in plenty here, employing over 15,000 people.
Limestone and Chalk are consumed by Tata, Birla and Nirma for their production of cement and soda ash. Bauxite is exported in huge quantum to the Gulf countries and south-east Asia.
"The approximate turnover of Limestone is 20 lakh metric tonne per annum amounting to Rs 17 crore per annum, the royalty amount of which is paid Rs 45 per MT, contributes Rs 9 crore per annum towards the state government's revenue," said Bharat Modhvadiya, son of Mulu Modhvadiya, the uncrowned king of mining business who was shot recently.
"The business is not given much priority and there is a lot of hassle in renewal of lease contracts," he said.
Mining is normally done on government land and lease contracts have to be renewed, but despite of owning the land, their lease contracts are not renewed. If at all its done, then they do not renew it for more than two hectare, he added.
Bauxite, which has a turnover of Rs 150 crore per annum in Porbandar, is also facing similar problems.
The royalty earned by the government here is about Rs 18 crore per annum.
The income received by the port through ship wharfage charges, which Rs 45 per MT, at an average would be Rs 11.25 crore. Despite of earning royalty amount worth Rs 29.25 crore, the policies for renewing or providing lease contracts is not business friendly, said Padu Raichura, an eminent bauxite exporter and president of the Porbandar District Chamber of Commerce and Industries.
As a result, those who are own the land and have mineral reserves lying beneath are not coming out openly to request lease for the land, but instead, are being handled by other operators. Gradually, anti-social elements acquire ownership of the land, added Padu.
According to Raichura, if the government chalks out a blue-print with guidance from business fraternity, it can excise and monitor the entire trade, thereby increasing the revenue potential, he added.
However, the state has taken few initiatives to encourage Chalk mining activities. "We feel it's because Chalk is only produced in the villages of Ranavav taluka in Porbandar. There are more than 129 mines producing 1 lakh MT of Chalk per annum amounting to Rs 12 crore per annum," said Suresh Raithatha, eminent business operators in Chalk mining from Porbandar.
Royalty money of Rs 32 lakh per annum is paid by the trade, Rs 32 per MT is charged as royalty on Chalk.
"Chalk is classified as one of the major minerals by the Centre but the state government very soon shall classify it as minor mineral," added Raithatha.

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