25 SEP, 2012, ET BUREAU
NEW DELHI: The Odisha government has decided to reserve all future iron ore, bauxite, manganese and chromite leases for Orissa Mining Corporation, saying state-run enterprises are less likely to flout norms.
A resolution to this effect was passed by the state government recently.
"State PSUs are likely to be more compliant of regulatory laws, and could enter into long-term arrangements with downstream users," said Rajesh Verma, principal secretary in the state's steel and mines department.
An official in the mines ministry said the Centre's nod would be required to turn it into law.
If cleared, officials say, it would lead to all pending reconnaissance, prospecting and mining applications in the state being disposed off. Leases already recommended by the state will, however, will remain unaffected.
The state's recommendation for a prospecting licence to Posco that is under litigation will, if cleared by the courts, thus be spared.
The move comes at a time when authorities have started a nation-wide crackdown on illegalities and irregularities in mining.
Mineral-rich Odisha has attracted a lot of downstream steel and aluminium capacity. The state plays host to companies such as Tata Steel , Jindal Steel and Power, Vedanta, Bhushan Steel and Monnet Ispat, besides several smaller sponge-iron makers. Some of these manufacturers are in the process of setting up their plants in the state.
The state has been pushing for an increase in royalty rates, particularly for iron ore, from 10 % at present to at least 20%. Chief Minister Naveen Patnaik had written to the prime minister last year seeking a mineral resource rent tax at 50% of surplus rent, aimed at increasing the state's share of the high profits.
Orissa Mining Corp, the largest chrome producer, is being investigated by the Competition Commission for possible monopolistic pricing. It recently started e-auction of chrome for users in the state, such as Jindal Stainless and Visa.
The state has followed that with a move to sell all merchant iron ore through e-auctions, toeing the line adopted in Karnataka by the Supreme Court where a ban on mining led to a sudden supply crunch.
Verma said post reservation "long-term arrangements or raw material from OMC can be linked to market indices, and transparent mechanisms can always be incorporated".
Odisha is counting on a recent Supreme Court judgement in the matter of Monnet Ispat and Energy Ltd vs Union Of India and others".
NEW DELHI: The Odisha government has decided to reserve all future iron ore, bauxite, manganese and chromite leases for Orissa Mining Corporation, saying state-run enterprises are less likely to flout norms.
A resolution to this effect was passed by the state government recently.
"State PSUs are likely to be more compliant of regulatory laws, and could enter into long-term arrangements with downstream users," said Rajesh Verma, principal secretary in the state's steel and mines department.
An official in the mines ministry said the Centre's nod would be required to turn it into law.
If cleared, officials say, it would lead to all pending reconnaissance, prospecting and mining applications in the state being disposed off. Leases already recommended by the state will, however, will remain unaffected.
The state's recommendation for a prospecting licence to Posco that is under litigation will, if cleared by the courts, thus be spared.
The move comes at a time when authorities have started a nation-wide crackdown on illegalities and irregularities in mining.
Mineral-rich Odisha has attracted a lot of downstream steel and aluminium capacity. The state plays host to companies such as Tata Steel , Jindal Steel and Power, Vedanta, Bhushan Steel and Monnet Ispat, besides several smaller sponge-iron makers. Some of these manufacturers are in the process of setting up their plants in the state.
The state has been pushing for an increase in royalty rates, particularly for iron ore, from 10 % at present to at least 20%. Chief Minister Naveen Patnaik had written to the prime minister last year seeking a mineral resource rent tax at 50% of surplus rent, aimed at increasing the state's share of the high profits.
Orissa Mining Corp, the largest chrome producer, is being investigated by the Competition Commission for possible monopolistic pricing. It recently started e-auction of chrome for users in the state, such as Jindal Stainless and Visa.
The state has followed that with a move to sell all merchant iron ore through e-auctions, toeing the line adopted in Karnataka by the Supreme Court where a ban on mining led to a sudden supply crunch.
Verma said post reservation "long-term arrangements or raw material from OMC can be linked to market indices, and transparent mechanisms can always be incorporated".
Odisha is counting on a recent Supreme Court judgement in the matter of Monnet Ispat and Energy Ltd vs Union Of India and others".
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