Nalco wants joint control with Andhra over bauxite mining

National Aluminium Company (Nalco), the public sector major, today proposed a joint control with the Andhra Pradesh government over bauxite mining in Visakhapatnam blocks through a joint venture with the AP Mineral Development Corporation (APMDC).

A K D Jadhav, secretary, mines, Government of India, and Nalco chairman and managing director C R Pradhan, along with other officials, met chief minister Y S Rajasekhara Reddy today with the proposal in an effort to resolve the contentious lease issue.

Though the state government in-principle agreed to allocate bauxite reserves to the extent of 250 million tonnes in the Visakha area to Nalco recently, it has been insisting on APMDC holding sole leasing rights and signing of an MoU similar to the one it inked with Jindal Group (JSW Steel Limited) in July, 2005.

The government even wanted Nalco to implement a rehabilitation package for tribals in the region.

But there was little headway in this regard during today's discussions. While assuring the Central team that the proposal would be considered, Rajasekhara Reddy, at the same time, suggested that the Centre examine the state's demand for ownership of mines, according to officials. The team told the chief minister that it would convey the views of the state government to the Centre.

The state government was also non-committal on the issue of equity participation as was suggested by Nalco. Nalco stated that the equity participation between Nalco and APMDC could be in the ratio of 10:90 to 49:51 respectively. If the equity participation was in the ratio of 49:51 in mining and refinery project, the investment of APMDC would work out to Rs 2000 crore.

Nalco is ready to invest Rs 5000 crore to Rs 7000 crore in mining and refinery project in the first phase and over Rs 10,000 crore in smelter in the second stage in Visakhapatnam.

During the today's meeting, the Nalco team urged the state government to allocate one more block to enhance life of its proposed project by five years. According to company sources, the promised allocation of 250 million tonnes would be sufficient to sustain Nalco's operations for 20 years.

A railway line between the site of bauxite mines and a refinery proposed by Nalco at K D Pet, either at the cost of the Centre or to be funded by the joint venture corporation and joint implementation of rehabilitation package for tribals were among the other issues discussed by the team with the chief minister.

As per the MoU entered into with JSW Steel Limited, which has been allocated 240 million tonnes of bauxite reserves by the state government in the same area, the company has to earmark .5 per cent of its total revenue for the welfare of tribals in the area.

Tug of war

Nalco stated that the equity participation between Nalco and APMDC could be in the ratio of 10:90 to 49:51 respec-tively