|Swapna I Hair loss Control I Dandruff Remedy I Hair Gain I Hereditary Hairloss I Site map I Contact|
|Leasing Iron Mines|
[ Reintroduction of the page on 25-5-2006, without any content addition or editing. No major need to edit after 2009 ]
Money can be minted from Mines. That is why there is demand for mines. Readers can recollect the recent Coal Scam. Public, the owners, do not benefit from such leases.
National Assets like Gas [ refer Reliance KG gas scam ]. iron ore mines, Coal, Lime stone quarries are all leased at very low fixed prices per kg - at say 25 paise per kg for iron ores. Duty is based on Quantity but there is no linkage to the Selling Price.
The companies do not pay more, when they raise the steel or Gas prices. Those who get the lease, gain.
For petrol, the Government charges ad valorem duty on the public / a percentage of the Selling price as tax. Why not the same procedure for all National Assets ?
Many people know about the Coal Scam. The full details are not out. Similar can be the case with some iron, lime and other leases.
Government's company making a Profit ! is it true ? yes
NMDC is the largest exporter of Iron Ore from India
Financial results of 2007 and 2008, advertised by NMDC: Business Standard 19-5-2008 Sales have gone up from 4186 Crores to 5711 Crores - 40% increase in Sales. Profit before Tax increased from 3498 Crores to 4947 Crores. For 2008, Profit after Tax is 3251 Crores on total sales, including other income, of 6381 Crores - just 50.9%. The earnings per share on Rs 10 Book Value share is only Rs. 246 Iron Ore Sales and exports is 5705 Crores and other minerals account for 6 Crores. Sesa Goa, when I checked last, had 52% Profit after accounting tax payment
If a Government of India undertaking makes this much profit and issues bonus shares also, you have to study the contents below and think of all things - even rake off
1] Sesa Goa - how do they make profit ? I went into their Profit and Loss Account - was shocked by their dependable and increasing operating margin - just iron ore mining and exporting the ore. Then I found the Hidden Treasure - Iron ore for only 2.5 paise per kg
2] Recently, NMDC, a Government of India concern gave 2 Bonus shares for each one share held. As on 7th August 2008, while Government is pressurising the Steel and Cement companies to hold the price, NMDC is asking for only 92% price rise for its Iron Ore ? No comments needed
3. Some poor people would routinely visit the steel / scrap iron companies, separate the iron from the sand with a magnet, pick useless iron bits and pieces and eke out a living, selling them.
They do not get that for 2 or 3 paise per kg. The Steel barons do !
Cost of Ore and Selling Price of Steel
Government is now charging Rs 25 per ton / 1000 kgs as the lease charges for the iron ore mines. They plan / threaten to raise it and you can bet that they would, to perhaps Rs 50 per ton, after Sail, Posco, Sesa Goa, Mittal, Jindal and Tisco have been awarded the lease at throwaway prices - when you and I apply for iron ore leases, we may be denied. Sail, NMDC, Sesa Goa and others export the iron ore.
Baseless justification for the loot and or the share
The Chinese buy the Indian ore at around 170 Dollars per ton. China is the biggest producer and exporter of Steel - despite paying 270 times more for the ore compared to the Indian Steel makers
As of January 2009, the Government has imposed anti dumping duty on import of Steel from China. How do they sell steel at 90% of Indian market prices ! To this day, I have not heard a satisfactory explanation
Gifts like the Iron Ore pricing are aplenty, if persons like Arun Shourie will probe and expose others
In 2006, I came across one company, which was going into or incurring loss and wanted some assistance to tide over. They had 250 plus employees. The total assistance they got from the Government through additional finance at nil interest, waived sales tax and other taxes for years - past and future, and some more. It was over 50% of the total planned expenditure for restructuring. Company recovered within 18 months [why the hell did it go bad in the first place ? ]
The poor and the needy, who needs such assistance, never get them. The rich beggars are showered with gifts that spills over
How to become a Billionaire ?
Start a Steel Plant in India !
Iron Ore mines are National Property. The Government continues to gift them
Arcelor Mittal Investment - an example to illustrate the Gift ND TV Profit - 19th or 20th November 2007
They are planning to invest 20 Billion Dollars - 20,000 Million Dollars - or 80000 Crores Rupees to produce 24 Million Tons steel.
In return, the iron ore demanded is only 500 Million tons to last over 20 years. The likely benefit can be 85 Billions.
What is the current market value of 500 Million Tons of Iron Ore ?
500 x Million = 0.5 Billion; 0.5 Billion x 170 per ton, market price of iron ore = 85 Billion
At even Rs 50 / ton, it means 0.5 x 50 = 25 Billion Raw Material got at 12.5 Billion
India will continue to be a land of have nots to produce many richest men
One related fact
In 2012, a bank woke up to claim the amount, about a lakh or more, due from a closed small scale unit. The owner had expired. The guarantor was served a legal notice for the amount due. While lending, banks do not check with the guarantor. The final amount was settled after some sensible negotiation by the bank. The guarantor paid the amount for one partner's due for whom he stood the guarantee.
Some Companies named J.K.xxxxx, Modixxxx owed over 100 Crores to the banks. The other companies sharing the same name, with relatives in the top slot, washed their hands off. [ I do not keep track and the final outcome is unknown to me]
|Errors and Omissions exempted. If there be any unwanted oversights, mistake in content or suggestions for improvements, kindly let me know|
|swapna hair Enricher/ saver, Cocolite, Silvershine, Autoshine and Metashine are our brand names|
|Personal website of R. Ranganathan M.Sc., [ MBA - IIMA] Main / original content: around 2000: last minor modification: May 7, 2017|