Bangalore,March 03: Mafia printing permits &NOCs to dodge duties says Lok Ayukta.Iron ore exported illegally to rake in massive profits
POWERFUL Bellary mine lords are raking in crores in ill- gotten profits by clandestinely transporting thousands of tonnes of iron ore from mines to a port near Karwar for export.
The elaborate illegal enterprise includes the printing of fake road permits to avoid paying tax, forging the forest department’s no objection certificates ( NOC) to show the iron ore was not mined from a forest area, and avoiding royalty worth several crores.
The black economy goes beyond mere tax evasion and results in a sort of a parallel government for mining, transportation and export operations.
This has coincided with a rise in iron ore prices in the international market.
A raid was conducted on February 20 by the Lok Ayukta, Karnataka’s anticorruption bureau. This exposed the illegal operations. Despite that, iron ore- laden trucks continue to ply between the Bellary mines and Bellikeri port near Karwar in Uttara Kannada district without being checked by the police or regional transport authorities.
The Lok Ayukta found that this movement of iron ore had resulted in a loss of Rs 1.3 crore to the transport department alone in the last 30 days because road tax had not been paid.
The shocking revelation was made during a raid on the premises of three iron ore exporters — Adani Shipping, Salgaocar Shipping and Mallikarjun Shipping — in the coastal district of Uttara Kannada last week.
The Lok Ayukta has withheld the names of the mining companies involved in this racket as investigations are on. “ It is shocking to note that the miners are printing their own road permits and NOCs. Upon verification, we found out that the road permits and NOCs and the government seals on them were counterfeit.
The signatures on these documents have been forged.
Besides, royalty has not been paid to the government for the ore transported to the port from the mines,” said a senior Lok Ayukta official.
Investigators have not yet computed the total loss to the government from the non payment of royalty and various other taxes on mining and export profits.
What the investigators do know is that several mining companies are printing their own road permits instead of getting them from the transport department. They are also printing NOCs carrying the stamp of the forest department to allow the transport of iron ore to the Bellikeri port. In the process, the mine lords evade the hefty mineral royalty that they should pay the government.
But, more serious is the total subversion of the government by the mine lords. “ About 48,000 tonnes of iron ore was transported from various mines in Bellary district to Bellikeri port in the last 30 days using counterfeit road permits and NOCs. The miners have failed to provide weekly reports on the payment of royalty. We have seized all documents and computers from the three shipping companies. We impounded the remaining stock of iron ore,” the officials said.
But, investigators could have only found a part of the stock while other miners could have smuggled larger quantities of iron ore during this period.
Clandestine movement of iron ore takes place in Karnataka whenever the prices in the international market go up. The state accounts for 30 per cent of the total exports ( 95 million tons in 2008- 09) from the country. About 85 per cent of the iron ore exporters in India rely on the spot trading market against long- term leases.
During the first week of February, for instance, the price of high grade iron ore ( 64 per cent and above ferrous content) in the spot trading market had touched $ 126 ( Rs 5,807) per tonne, up from $ 74 ( Rs 3,410) per tonne in September 2009, according to the Federation of Indian Mineral Industries.
“ During the same period, the clandestine movement of iron ore was reported between the mines in Bellary district and the Bellikeri port. What has shocked us is that the trucks are not being checked by the Regional Transport authorities even after the raids,” Lok Ayukta officials said.
They suspect the involvement of the officers of the Regional Transport department in this racket.
“ The Regional Transport authorities are supposed to verify the documents of every truck at the district check post. They could have ascertained whether the road permits and NOCs were genuine.
But it seems they were deliberately overlooked by the Regional Transport authorities,” the officials said.
For every truck transporting iron ore, the miners have to pay road permit fee to the government.
As iron ore mining is carried out on the fringes of the forests in Bellary district, the miners have to obtain an NOC from the forest department. If the forest department finds out that ore has been mined from the forests, the stock will be impounded. This is why an NOC is required to show that the ore was not mined from a forest area.
Besides, the miners have to pay a royalty of Rs 80 to Rs 140 per tonne of iron ore extracted depending on the grade. A weekly report on the royalty paid has to be submitted to the mines and geology department. Once these formalities are completed, the documents have to be handed over to the ore transporting companies.