In a major setback to the Rs 54,000-crore Posco steel project, the Orissa High Court today set aside the state government’s recommendation for providing a prospecting licence to the company for Khandadhar iron ore mines in Sundergarh district.
The South Korean steel major had recently got a reprieve in the form of finalisation of the compensation package for the project-affected families.
Disposing of a writ petition of Geomin Minerals and Marketing Ltd, a Bhubaneswar-based company, a two-member division bench of the High Court comprising Justice B P Das and Justice B P Ray directed the state government to take a fresh decision on the recommendation of prospecting licence in Posco’s favour, giving preferential right of consideration to the petitioner.
The High Court has directed the state government to conduct a fresh hearing of all the 226 applicants for the Khandadhar mines.
Earlier, in January 2009, the Orissa government had recommended to the Government of India a grant of prospecting licence in favour of Posco over an area of 2,500 hectares at Khandadhar. The recommendation was made in favour of the company under Section 11(5) of the Mining and Minerals (Regulation and Development) Act. Subsequently, several companies, including Geomin Minerals, had challenged the state government’s decision to recommend the licence in favour of Posco India.
Terming the decision of the Orissa government as ‘arbitrary’ and ‘illogical’, Geomin Minerals had claimed that it had made the first application for mining lease in the area way back in August 1991.
The preferential right for consideration was available to the petitioner and hence, the recommendation made in favour of Posco was not valid, the High Court observed in its judgment. The court also directed the state government to dispose of all pending applications of the petitioner within a period of four months.
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When contacted, a top official of the state steel and mines department said, “The judgment has come to our notice. However, we are yet to get a copy of the court verdict and we will file our response only after we get a copy of the same.”
A Posco official declined to comment on the issue, saying it was a matter of the court.
Besides the petition of Geomin Minerals, about a dozen other similar petitions, including an intervention petition of Visa Steel Ltd, were tagged with it and were adjudicated jointly. The bench, however, rejected the contention of Visa Steel and asked it to file an independent writ petition if it had any cause of action.
This is the second time the state government has suffered a setback in its attempt to recommend the prospecting licence of Khandadhar mines in favour of Posco.
Earlier, its recommendation in December 2006 was turned down by the Union mines ministry, which asked the state government to hear all the applicants before taking a final call on the matter.
Accordingly, the steel and mines secretary of the Orissa government heard all the applicants participating in the hearing process from August 2007. The process was completed on August 7, 2008. While 227 applicants had applied for the Khandadhar mines, 172 applicants participated in the hearing and 54 applicants remained absent.