30 OCT, 2012, MEERA MOHANTY & NAGESHWAR PATNAIK, ET BUREAU
NEW DELHI/BHUBANESHWAR: The iron-ore mining industry in Odisha is facing its worst ever crisis, after 10 large iron-ore mines in the state were directed to either stop or curtail mining operations. The state has decided that mining will henceforth only be allowed for captive use and has told miners whose leases are up for renewal that they have three days to comply.
Of the 10 large mines in Joda district, two mines belong to Aditya Birla Group's unlisted mining arm - Essel Mining, which has no steel plant. The other two on the list, belong to SAIL and Tata Steel, who as per the new orders, will only be allowed to mine what they need, so that the life of the mines can last for the next 30 years.
The notice gives them three days to comply. The Birla Group spokesperson declined to comment, stating that Essel Mining is not a listed company. An email questionnaire sent to Tata Steel went unanswered.
According to those close to the steelmaker setting up a greenfield plant in the state, its reserves are already depleting and it has informed officials that its mining within the imposed limit.
The state government's recent moves since the beginning of this month to reserve all standalone mining to the state firm through notifications is nothing but 'posturing,' an industry representative said.
The recent moves by the state government assumes significance, as a central commission, under former Justice M B Shah, is currently investigating illegal mining across the country and is to submit its first status report on mining in Odisha.
"These special conditions are outside the legislative ambit. Restrictions or special conditions cannot be imposed arbitrarily, without prior approval from the centre," said a policy maker who didn't want to be identified.
However, Deepak Kumar Mohanty, director Mines, contested this view: "I don't think we need any central approval for this (26 October order)," Mohanty said.
Following two resolutions, one dated October 3 and the other 12 October, the government has stipulated that leases awaiting second and subsequent renewals and are operating under a deemed extension, will have to restrict production for exclusive captive use till a decision is taken for renewal of part or whole of the lease.
The 26 October notice, from the office of the Deputy Director of Mines of Joda circle said: "In case of first renewals of a mining lease granted for captive purpose, no mineral shall be put to non-captive use. Any such use (non-captive) amounts to violation of lease condition."
Earlier this month, Odisha announced all future mining leases of iron ore, bauxite, chrome and manganese will be handed over to Odisha Mining Corpration. It has even turned down Rashtriya Ispat Nigam Ltd, a state-owned steel maker, a captive mine citing this decision, despite the fact that any such reservation for a state PSU (invoking Section 17 A (2) of Mines and Minerals (Development & Regulation) MMDR Act-1957) requires prior central approval. According to steel ministry officials, no such approval has been sought recently.
"To my mind, this is ad hoc and won't stand legal scrutiny. The state is eyeing the mining industry which has been around for hundred years for short-term gains. A steel plant is planned for 30 years. The Odisha government is only driving away investments," said a senior official affiliated to one of the country's largest steelmaker.
Affected mine owners point out that the Oct 26 order is retrospective. No such condition exists in their lease contracts with the government, one official said. Senior Odisha High Court lawyer, Bibhu Prasad Tripathy said, "The Supreme Court categorically held that major minerals being national wealth are under the control of the Central government and they are to be utilised in the interest of nation as a whole contrary to the minor minerals which are considered to be regional wealth put under the regulatory domain of the state government."
"The state government has no competence or jurisdiction to take any policy decision or to regulate the scheduled/ major minerals, which violates the provision so the MMDR Act, 1957 and Mineral Concession Rules, 1960," he added.
Odisha Mining Corporation barely runs three of its 35 leases.
However, All Odisha Steel Federation president, P L Kandoi welcomed the move saying that it would ensure "equitable sharing of minerals with value addition" bringing growth and prosperity in the state.
The other firms among the 10 miners sent orders to comply, are KJS Ahluwalia, K N Ram, MISL (or Mesco Steel) who have sponge iron plants. The others on the list, with no downstream manufacturing as Essel, are Bhanja Minerals, KMC, Kaypee Enterprise and R P Sao.
NEW DELHI/BHUBANESHWAR: The iron-ore mining industry in Odisha is facing its worst ever crisis, after 10 large iron-ore mines in the state were directed to either stop or curtail mining operations. The state has decided that mining will henceforth only be allowed for captive use and has told miners whose leases are up for renewal that they have three days to comply.
Of the 10 large mines in Joda district, two mines belong to Aditya Birla Group's unlisted mining arm - Essel Mining, which has no steel plant. The other two on the list, belong to SAIL and Tata Steel, who as per the new orders, will only be allowed to mine what they need, so that the life of the mines can last for the next 30 years.
The notice gives them three days to comply. The Birla Group spokesperson declined to comment, stating that Essel Mining is not a listed company. An email questionnaire sent to Tata Steel went unanswered.
According to those close to the steelmaker setting up a greenfield plant in the state, its reserves are already depleting and it has informed officials that its mining within the imposed limit.
The state government's recent moves since the beginning of this month to reserve all standalone mining to the state firm through notifications is nothing but 'posturing,' an industry representative said.
The recent moves by the state government assumes significance, as a central commission, under former Justice M B Shah, is currently investigating illegal mining across the country and is to submit its first status report on mining in Odisha.
"These special conditions are outside the legislative ambit. Restrictions or special conditions cannot be imposed arbitrarily, without prior approval from the centre," said a policy maker who didn't want to be identified.
However, Deepak Kumar Mohanty, director Mines, contested this view: "I don't think we need any central approval for this (26 October order)," Mohanty said.
Following two resolutions, one dated October 3 and the other 12 October, the government has stipulated that leases awaiting second and subsequent renewals and are operating under a deemed extension, will have to restrict production for exclusive captive use till a decision is taken for renewal of part or whole of the lease.
The 26 October notice, from the office of the Deputy Director of Mines of Joda circle said: "In case of first renewals of a mining lease granted for captive purpose, no mineral shall be put to non-captive use. Any such use (non-captive) amounts to violation of lease condition."
Earlier this month, Odisha announced all future mining leases of iron ore, bauxite, chrome and manganese will be handed over to Odisha Mining Corpration. It has even turned down Rashtriya Ispat Nigam Ltd, a state-owned steel maker, a captive mine citing this decision, despite the fact that any such reservation for a state PSU (invoking Section 17 A (2) of Mines and Minerals (Development & Regulation) MMDR Act-1957) requires prior central approval. According to steel ministry officials, no such approval has been sought recently.
"To my mind, this is ad hoc and won't stand legal scrutiny. The state is eyeing the mining industry which has been around for hundred years for short-term gains. A steel plant is planned for 30 years. The Odisha government is only driving away investments," said a senior official affiliated to one of the country's largest steelmaker.
Affected mine owners point out that the Oct 26 order is retrospective. No such condition exists in their lease contracts with the government, one official said. Senior Odisha High Court lawyer, Bibhu Prasad Tripathy said, "The Supreme Court categorically held that major minerals being national wealth are under the control of the Central government and they are to be utilised in the interest of nation as a whole contrary to the minor minerals which are considered to be regional wealth put under the regulatory domain of the state government."
"The state government has no competence or jurisdiction to take any policy decision or to regulate the scheduled/ major minerals, which violates the provision so the MMDR Act, 1957 and Mineral Concession Rules, 1960," he added.
Odisha Mining Corporation barely runs three of its 35 leases.
However, All Odisha Steel Federation president, P L Kandoi welcomed the move saying that it would ensure "equitable sharing of minerals with value addition" bringing growth and prosperity in the state.
The other firms among the 10 miners sent orders to comply, are KJS Ahluwalia, K N Ram, MISL (or Mesco Steel) who have sponge iron plants. The others on the list, with no downstream manufacturing as Essel, are Bhanja Minerals, KMC, Kaypee Enterprise and R P Sao.
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