The Union mines ministry has directed the state government to provide reasons for its request of granting iron ore mining lease over 1,000 ha land in Keonjhar district in favour of Bhushan Power and Steel Ltd (BPSL) without notifying the said area, which violated the Mineral Concession Rules(MCR), 1960.
As per section 59 (1) of MCR, the state government cannot grant an area to a particular entity for mining lease unless it is notified or advertised. But the Union government can allow such type of grant proposal if sufficient reason is provided by the state government, section 59 (2) says.
The central ministry has asked for precise reason to go ahead with the proposal along with other information such as authenticated map of the area and details of shareholding pattern after the company changed its name from Bhushan Limited to BPSL.
The state government said, it has all the reasons to grant 1,048 ha iron ore area in Thakurani Reserve forest to BPSL as it was directed by the Supreme Court to do so.
“The apex court had asked us to grant a lease to the company as we had committed it in the MoU (Memorandum of Understanding). We can propose to grant the lease of an un-notified area as per section 11 (5) of Mines Mineral Development and Regulation (MMDR) Act,” said Deepak Mohanty, director of mines with the state government.
The clarification sought by the Centre could delay the process of lease grant, and hence, would affect the raw material security of the company having a 2.3 million tonne steel plant at Thelkhuli in Sambalpur district. Due to acute supply problem in Odisha, the top iron ore producer, BPSL was forced to import iron ore pellets from Brazil last year, making it the first state-based steel company to do so.
“The Centre is at discretion to cancel the proposal if they find the reasons are unsatisfactory. They (union mines ministry) are not bound by Supreme Court order,” said a city-based expert.
The Supreme Court last year had directed the state government to grant a mining lease in favour of BPSL as committed in the MoU. The state government, which has not granted a single mining lease in favour of a particular company ever since mining irregularity surfaced in 2008-09, had to send the grant proposal to the Centre for final order in December 2012.
However, soon after the BPSL order it was quick to issue guidelines for MoU renewal, in which officials were asked to remove raw material security clause while drafting the agreements.
