The Orissa government has found two state-run public sector undertakings among 13 mine lessees indulging in illegal mining, official sources said.

The state government is processing a show-cause notice likely to be served against its own public sector undertaking (PSU) Orissa Mining Corporation (OMC) soon on the charge of violation of mining rules, the sources said.

OMC, considered the highest revenue generating PSU for the state, was found indulging in illegal mining activities.

Violation was detected in OMC's two chromite mines and another mine owned by IDCOL, also a state run PSU.

Of the 13 mine lessees found in illegal mining activity during 2009 and 2010, two were state PSUs operating three separate chromite mines, they said.

The others include Essel Mining & Industries Limited, S N Das Mohpatra, Indrani Patnaik, Arjun Lada, M S Deb and Ram Bahadur Thakur (RBT).

OMC, which was allotted 502.457 hectares of chromite mines at South Kaliapani in Jajpur district, was found to have unauthorisedly encroached into another lease hold area.

The state's steel and mines minister, Raghunath Mohanty, said, ''The state government has been processing a show-cause notice against OMC on the charge of violation detected.''

Similarly, OMC was also found violating mining rules at its Kaliapani, Ostopal and Gurjang chromite mines in Jajpur district, they said.

While none of the private mine operators was available for comment, officials in state-owned PSUs declined to comment.

The state-owned IDCOL which owned Tilangi and Ostapal chromite mines spread over 65.683 hectares in Jajpur district too was found violatiing lease covenants, a senior official in the mines department said.

In case of private mine-owners, the state government had already rejected application of RBT which was allotted 192.63 hecatres of manganese mines at Kolha, Rudukela and Katasahi in Keonjhar district, he said.

The government was also inquiring into M S Deb mines accused of carrying out illegal mining beyond the lease area.

Deb was allotted a manganese mine over 115.739 hectare at Duduna and Baitarani area.

The state government has also completed hearing of Arjun Lada's iron and manganese mines which was located over 326.50 hectare of land at Haromoto and Pacheri in Keonjhar district.

In case of Indrani Patnaik's Unchabali iron ore mines in Keonjhar district, the state government has found gross violation of lease convenants by clandestinely selling 3,04,568.170 mt of iron ore by non-maintenance of proper records as required under the law.

The cost of the illegal mining was estimated at Rs 1131,72,22,470.