Australia is keen on investing $2 billion (around Rs 9,000 crore) in Orissa’s mining sector.
“We have an investment proposal of $2 billion for the mining sector of Orissa if all the issues related to it are addressed properly”, said Peter Varghese, Australian High Commissioner to India.
He was speaking on the occasion of his visit to the city campus of Centurion University of Technology & Management.
When asked about his meeting with state chief minister Naveen Patnaik, he said, “I along with chief executive officer of Rio Tinto discussed about issues related to mining in Orissa in the presence of Orissa Mining Corporation (OMC) officials for taking up mining projects in Orissa.”
Asked about the fate of joint venture (JV) between OMC and the Anglo Australian mining major Rio Tinto, the High Commissioner replied, “We have taken up the issue with the state government and are awaiting a positive response.”
It may be noted that Rio Tinto had entered into a JV for $1-billion iron ore mining project with OMC on February 24, 1995 to develop Gandhamardan and Malangtoli iron ore deposits in Keonjhar and Sundergarh districts in Orissa with a mining capacity of 25 million tonnes per annum .
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However, the project could not take off due to different reasons including slump in the iron ore market and proposal for direct export of iron ore, prompting the OMC later to seek winding up of the JV as per advice of the Solicitor General of India.
This sparked off a legal battle between the two parties. While OMC had filed a case in the Orissa High Court to wind up the JV agreement, Rio Tinto had approached the Company Law Board of India to contest OMC’s claim.
The project is mired in uncertainty, even as both the parties are looking for out of court settlement and are understood to be in talks for forming a fresh JV pact.
According to the original pact, Rio Tinto was to hold 51 per cent equity in the JV while OMC would own the balance 49 per cent. The two JV partners had agreed to export 50 per cent of the mined iron ore while the remaining 50 per cent was to be set aside for domestic consumption.
The project was also billed as Rio Tinto’s first major foray into India’s mining sector. Rio Tinto was to bring its state-of-the-art technology for the mining project.