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Mining scam - OMC to pay INR 2,100 crore

Mining News - Published on Wed, 27 Dec 2017

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Daily Pioneer reported that state run Odisha Mining Corporation would pay a penalty of over INR 2,100 crore by December 30 while implementing the Supreme Court’s order on illegal mining. The apex court has set the payment date by December 31, which is a Sunday; so, the OMC would deposit the money by next Saturday in the accounts of the Special Purpose Vehicle set up for the purpose.

The SPV, Odisha Mineral Bearing Areas Development Corporation, has been set up to expedite developmental activities in the mining areas.

After the Supreme Court’s order, the State Government is expecting a total penalty collection of about INR 17,575 crore towards violation of environment laws and another INR 2,000 crore from violation of forest clearance, mining plan and operate to consent norms for all the erring mine leaseholders, including the OMC.

So, the OMBADC would be richer by nearly INR 20,000 crore to undertake massive developmental projects in the mineral zones.

Now, all the deposits of the OMC in the banks would dwindle and there would be hardly any cushioning for its expansion programmes. The OMC was having over INR 2,300 crore in its kitty and it had lined up major expansion activities.

While the OMC’s turnover in 2016-17 was around INR 2,300 crore, it is expecting INR 2,500 crore in 2017-18. It had a target to increase its production to 20 million tonne per annum by 2019-20 by utilising its own resources in its kitty.

The OMC has set up an Odisha Mineral Exploration Corporation Ltd as its 100 % subsidiary to conduct exploration activities for new mining sites.

Four manganese blocks in Balangir district, four bauxite blocks in Rayagada, seven iron ore blocks in Khandadhar, one iron ore block in Thakurani-A have been identified for exploration through the OMECL.

These projects require huge investment, but the OMC would have much less liquidity to fund these initiatives. Though the OMC has extended loans to the Gridco and the NINL of around INR 1,800 crore, these PSUs would not be able to pay all the amounts on a sudden at one go. So, to fund its expansion projects, the OMC would be left with no choice but borrowing funds from financial institutions, said sources.

In the situation, the OMC’s expansion of projects would be delayed by more than two years as getting finances from financial institutions take a lot of time due to paper works.

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Posted By : Rabi Wangkhem on Wed, 27 Dec 2017
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