The state government has agreed to reserve Pottangi bauxite deposit in Koraput district in favour of National Aluminum Company (Nalco) provided the company fulfills certain conditions.
“The state government is willing in principle for reservation of Pottangi bauxite deposit area of Koraput district for undertaking mining operation through Nalco subject to fulfillment of conditions,” the department of steel and mines of Odisha government said today in a letter addressed to Nalco chairman and managing director (CMD).
The conditions set out by the government included settlement of the water cess claims pending against the company and commitment to carry out peripheral development work in the Pottangi area.
It may be noted, the government has raised a claim of Rs 140 crore on Nalco towards water cess and the company has gone to the court against this. The matter should be settled either through an order of the court or out of court settlement before allotment of fresh mining lease to Nalco, the letter pointed out.
Besides, the government maintained that it will have no hesitation to recommend to the Centre for reserving the Pottangi deposits for Nalco if the company promises to develop the peripheral area surrounding the mine through Nalco Foundation. A five year perspective plan has to be drawn up for the purpose.
The government said, the Navratna PSU should contribute either two per cent of its net profit or Rs 20 crore, whichever is higher, to the Foundation every year starting from April 2010. This will be in addition to the one percent of the profit the company is set to spend through Rehabilitation and Peripheral Development Advisory Committee (RPDAC) and over and above the benefits likely to be accrued to the locals because of the proposed amendments in the Mines and Minerals Development and Regulation (MMDR) Act.
Difficulties in acquiring mining lease for Pottangi bauxite mine, which has over 75 million tonne deposit, has made Nalco to put on hold its investment to the tune of Rs 6,500 crore for third phase expansion as its existing reserves will last only for over a decade. Nalco had applied for the Pottangi deposits about 20 years back.