The Centre has advised the Odisha government that a number of recent resolutions it has taken is not in concurrence with the law.
NEW DELHI: The Centre has advised the Odisha government that a number of recent resolutions it has taken, including reserving all future mining of important minerals for a state-owned firm, is not in concurrence with the law.
Senior mines ministry officials confirmed that advisories against these actions, vetted by the law ministry, are on their way. The advisories will tell Odisha that some of its demands are measures against the Indian Constitution. For instance, Odisha is demanding that half of the mineral excavated from leases pending renewal be sold to sponge-iron and steelmakers located within the state.
Between September and October last year, the mineral-rich eastern state took several measures relating to bauxite, iron ore, chrome and manganese mining that go into making steel and its alloys and aluminum. Primarily it has argued it needs to cater to several thousand crore of investments it attracted on the promise of raw material security.
The state owns one third of the country's iron ore, more than two thirds of total bauxite reserves and much of the chrome resources. For decades now Birla's Essel BSE -2.85 % Mining, KJS Ahluwalia, Tata Steel BSE 0.31 % and Steel Authority of India (SAIL) BSE 0.25 %, among others, have had their mining operations in Odisha. The BJD government has wooedPosco, Vedanta, Jindal Steel and Power BSE 0.56 %, both the Bhushan brothers and many others to set up downstream industries in the state. It now needs to deliver its part of the commitment, raw material security.
On September 18, 2012, under great pressure over allegations of illegal and unrestrained mining, Odisha declared it was reserving all deposits, not yet granted or promised, for state firm Orissa Mining Corporation Ltd. It cited a recent Supreme Court judgment in the Monnet Ispat case recognising the "inherent right (of the state) to reserve any particular area for exploitation for the public sector."
The said provision -- Section 17A (2) of the Mines and Mineral (Development and Regulation) Act, 1957 -- requires the Central government approval, and can be applied after the boundaries of such a minerals area are specified and notified. Odisha's steel and mines secretary Rajesh Verma says, "We don't need to take central approval for a policy decision. Identifying coordinates of these deposits requires a lot of ground work. That exercise is going on, and subsequently we will seek specific government approval."
But the Centre disputed the state's contention. "It hasn't sought the Centre's approval, but passed the resolution. In a way it presumes a nod that it hasn't got," said a senior official asking not to be identified.
In October last year, Odisha also announced it would not renew leases for a second and subsequent term unless the mineral produced was used for captive purposes. This brought business already under immense scrutiny to a near halt. A lease normally is given for 20-30 years before it comes up for a renewal.
