CAG Report Exposes Rs 1,328 Crore Penalty on Odisha Mining Corporation for Excess Production
A recent report by the Comptroller and Auditor General (CAG) has flagged that the state-owned Odisha Mining Corporation (OMC) is liable to pay a substantial penalty of Rs 1,328 crore for exceeding production limits in two of its key mines. The report, which was tabled in the Odisha assembly on Tuesday, scrutinizes the performance of state public sector undertakings and uncovers significant violations in mining operations.
Details of Excess Production and Penalties
According to the CAG findings, in the Kodingamali bauxite mine, OMC produced 27 lakh metric tonnes (MT) of bauxite during the 2018-19 fiscal year. This production far exceeded the approved consent to operate (CTO) limit of 22.6 lakh MT, resulting in an excess of 4.4 lakh MT. As a consequence, this overproduction has attracted a hefty penalty of Rs 1,298.39 crore.
Similarly, in the Sukrangi chromite mine, OMC produced 1.67 lakh MT of chromite against the approved environmental clearance (EC) capacity of 1.30 lakh MT for the same year. The excess production of 37,100 MT would entail an additional penalty of Rs 29.98 crore, as detailed in the report.
Historical Context of Penalties
It is important to note that this is not the first instance of OMC facing financial repercussions for mining violations. Following a Supreme Court judgement in August 2017 regarding the collection of fines for excess mining, OMC had already paid Rs 4,364.15 crore in penalties between 2017 and 2022. This amount included Rs 3,761.88 crore for violating environmental and forest clearances, and Rs 602.27 crore for mining beyond the limits allowed under consent to operate and approved mining plans.
Operational Lapses and Recommendations
The CAG report also highlighted several operational deficiencies within OMC. The corporation holds 36 mining leases, but 18 of these have remained inoperative for periods ranging from six to 35 years, indicating poor asset utilization and planning. Despite achieving a turnover of Rs 23,630.79 crore, the CAG pointed out that inefficiencies, avoidable expenditures, and weak oversight mechanisms continue to erode OMC's financial performance.
To address these issues, the CAG has recommended the implementation of stronger compliance measures, improved planning strategies, rigorous contract scrutiny, and enhanced cost-control mechanisms. These steps are deemed essential for bolstering the corporation's operational efficiency and financial health in the future.
The findings underscore the need for stricter adherence to regulatory frameworks in the mining sector to prevent such costly violations and ensure sustainable resource management.
