Jharkhand, Tata Steel spar over iron ore block lease

The Jharkhand government may object to Tata Steel giving out on a new lease the block six of its Noamundi iron ore mines in the West Singhbhum district to the Kolkata-based Rs 750-crore Adhunik Group.

An officials with the Jharkhand mines and geology department said this was violative of the mining lease agreement signed between Tata Steel and the state and, therefore, a showcause notice will be issued shortly to the company.

The lease agreement, the officials said, specified that Tata Steel could only do captive mining of iron ore from the Noamundi mines. :Any mining activity without prior approval of the state government is a violation of the Rule 37 of the Mineral Concession Rules, 1960, which deals with the transfer of lease," the official said.

A Tata Steel spokesperson said the company had so far not received any communication on the matter from the state government. "There is no violation by Tata Steel in letter or spirit under any provision of mining law," he said in a faxed response to a questionnaire.

Nirmal Agarwal, director, Adhunik Steel, though confirmed about his company working on a contract basis with the Tata company, denied having committed any violation saying contractual mining is all too common.

He added, "Adhunik Steel was only into mining and giving the product to Futuristic Steel, which was reconverting the iron ore into sponge iron. The sponge iron is finally used by Tata Steel itself," he said.

The lease agreement with the Adhunik group, the Tata Steel spokesperson said, had expired on July 31 this year and the company was yet to decide whether to extend the lease or mine the iron ore for its own factories.

Block six, according to the spokesperson, is a small mine with reserves of around 25,000 tonne per annum. "Now that the company is ramping up its production capacity at Jamshedpur to 5.4 million tonne per annum, there is a possibility that we might need the mine for our own use," he said.