_ Jindals sell iron ore at 100 percent profit in Karnataka
Truck drivers wait to unload their trucks in the D.R.Reddy mines
In Hosadurga, Jindal group of industries buys C grade iron ore from the state government at preferential rates and resells it for a 100-percent profit. The government and other companies make only around 15 to 20-percent profit.
“After adding all the cost of transportation and processing the final amount which we spend on getting the iron is Rs.10.38 per kilogram while it is sold at Rs.22 by our company,” said M. K. Toor, deputy general manager of Jindal Steel, Orissa. “This gives us 100 percent profits on the sale.”
The Jindal’s add 75 percent of A grade combined with 25 percent C grade ore, this along with the transportation cost comes up to Rs.10.38 per kilogram.
A government transportation document suggested that one truck carries approximately 16 tons of iron ore and around 15 trucks per day go through. This brings them 1,680 tons of C-grade iron ore from Hosadurga taluk. The royalty paid to the government for 15.98 tons is Rs.1,310.36.
“In Karnataka there are few takers of the iron ore because of poor quality, and hence has few takers for it,” said Toor. “The processing cost for 1 kilogram is Rs.4 including the transportation cost.”
In Hosadurga taluk, C- grade iron ore is mostly available which is sold at Rs.1.53 per kilogram.
“We sell the ore at low price, specially the C-grade ore as there are no takers for it,” said N. M. Udayashankara, deputy director of the Chitradurga district.
Companies that do not have access to the low purchase price typically make a 15 to 20-percent profit, according Toor. He also said that they amalgamate either A and C or B and C grade iron ore in the proportion of 3:1.
“Jindals entered in a 30-year contract with the government under which we supplied them with the iron ore,” said Udayashankara. “They installed their Rs. 500 crore machineries here.”
Jindal were in news in 2011 after the Lokayukta report released suggested that the government has favored the Jindal group of Industries.
Toor also said that the general profit margin for other industries like Vedanta is between 15 to 20 percent.
He also said that in Hosadurga taluk, 90 percent of the ore is bought by Jindals while 10 percent is bought by the local companies there.
According to the Lokayukta report, the total quantity transported from LMC (indicating Lakshminarayan Mining Company) to Jindal (indicating JSW) was 27,024.39 MTs during June 2010. While the prescribed to load was only around 16 tons, the Jindals were loading 40 tons, making the transportation process illicit.
“Now without proper paper work the truck is not released from the site,” said Abdul Sattar, truck driver of the Mubarak transporters for the mines. “However earlier, the Jindal trucks used to load 30 tons instead of 16 tons earlier as there was no proper documentation.”
This was verified by the Lokayukta report which stated that between 02.6.2010 and 13.6.2010, Total quantity transported adds up to 38,286.06 Metric tons. Permits did not march with the transportation of iron ore from LMC to JSW.
The government sells the iron ore through an e-auction website called e-sugam.
“After adding all the cost of transportation and processing the final amount which we spend on getting the iron is Rs.10.38 per kilogram while it is sold at Rs.22 by our company,” said M. K. Toor, deputy general manager of Jindal Steel, Orissa. “This gives us 100 percent profits on the sale.”
The Jindal’s add 75 percent of A grade combined with 25 percent C grade ore, this along with the transportation cost comes up to Rs.10.38 per kilogram.
A government transportation document suggested that one truck carries approximately 16 tons of iron ore and around 15 trucks per day go through. This brings them 1,680 tons of C-grade iron ore from Hosadurga taluk. The royalty paid to the government for 15.98 tons is Rs.1,310.36.
“In Karnataka there are few takers of the iron ore because of poor quality, and hence has few takers for it,” said Toor. “The processing cost for 1 kilogram is Rs.4 including the transportation cost.”
In Hosadurga taluk, C- grade iron ore is mostly available which is sold at Rs.1.53 per kilogram.
“We sell the ore at low price, specially the C-grade ore as there are no takers for it,” said N. M. Udayashankara, deputy director of the Chitradurga district.
Companies that do not have access to the low purchase price typically make a 15 to 20-percent profit, according Toor. He also said that they amalgamate either A and C or B and C grade iron ore in the proportion of 3:1.
“Jindals entered in a 30-year contract with the government under which we supplied them with the iron ore,” said Udayashankara. “They installed their Rs. 500 crore machineries here.”
Jindal were in news in 2011 after the Lokayukta report released suggested that the government has favored the Jindal group of Industries.
Toor also said that the general profit margin for other industries like Vedanta is between 15 to 20 percent.
He also said that in Hosadurga taluk, 90 percent of the ore is bought by Jindals while 10 percent is bought by the local companies there.
According to the Lokayukta report, the total quantity transported from LMC (indicating Lakshminarayan Mining Company) to Jindal (indicating JSW) was 27,024.39 MTs during June 2010. While the prescribed to load was only around 16 tons, the Jindals were loading 40 tons, making the transportation process illicit.
“Now without proper paper work the truck is not released from the site,” said Abdul Sattar, truck driver of the Mubarak transporters for the mines. “However earlier, the Jindal trucks used to load 30 tons instead of 16 tons earlier as there was no proper documentation.”
This was verified by the Lokayukta report which stated that between 02.6.2010 and 13.6.2010, Total quantity transported adds up to 38,286.06 Metric tons. Permits did not march with the transportation of iron ore from LMC to JSW.
The government sells the iron ore through an e-auction website called e-sugam.