Response to Centres no next week

BHUBANESWAR: With the Centre rejecting the State Government’s demand for imposing a special tax on ‘super normal profits’ earned by mine-owners, Chief Minister Naveen Patnaik has said the matter is being examined and a response will be given next week. A letter has been received from the Centre in response to Odisha’s demand for imposition of mineral resource rent tax on super normal profits made by miners, the Chief Minister told mediapersons here on Friday. The letter, sent by Union Minister of State for Mines Dinsha Patel, is being perused by the Steel and Mines Department, he said. “An appropriate reply will be given to the Centre early next week,” the Chief Minister said.  Naveen had sought imposition of the special mineral resource rent tax on miners in two letters to the Centre in November last year and in January. Describing the Odisha Government’s demand as unjustified, Patel, in his letter, said all mine-owners do not earn super normal profits like the State-owned National Mineral Development Corporation (NMDC). He said it may not be prudent to generalise that the entire iron ore mining sector is earning profit to the scale equivalent to NMDC which is a fairly large miner enjoying high-grade deposits.  Iron ore fine exporters in Odisha sell the raw material at around ` 3,000 per tonne at mines area, but charge a hefty ` 6,500 per tonne for exports due to higher freight charges spent on transportation through both rail and road routes, the CM’s letters said. However, before the export boom, they were selling the fines at around ` 500 per tonne which is why the State Government had sought super normal profit tax on the lines of the one in Australia, so that the tax income could be spent on development of areas surrounding the mines, Naveen had said.  But the Australian tax is not meant for provincial exchequer, the Union Minister said in his letter. In order to develop mineral-bearing areas, the State needs to ensure effective mechanism for sharing the royalty revenue, Patel suggested in his letter to the Chief Minister. Rather than demanding higher royalty revenue, the State should focus on clearing pending mines lease proposals to increase its revenue, he said. Stating that the State Government is slow in disposing of 3,612 pending applications, lying with the Mines Department as on December 2011, for grant of mineral concessions, he said this is an area of serious concern.