Orissa Congress wants to unbundle mining sector

The senior Congress leader and former Union minister for coal and steel, Dilip Ray has suggested de-linking mining from manufacturing for deriving optimum benefit out of the vast mineral resources in Orissa and avoid controversies over allotment of captive mines to various manufacturing companies.

Ray demanded holding of an all-party meeting for the formulation of a comprehensive mining policy in this regard.

In a statement, Ray said, the state had a reserve of 1728 million tonne of bauxite, 177 million tonne of chromite and 3600 million tonne of iron ore. Of this, the state-owned company, Orissa Mining Corporation (OMC) controls 400 MT iron ore, 19 MT managanese, 28 MT chromite and 220 MT bauxite.

With the government leasing out mines on captive basis indiscriminately, sixty percent of the mineral wealth is now in the control of various private companies, he added.

Again, most of these companies, which had their expertise in mineral processing and not in mining activity, are resorting to butcher mining tactics, he alleged. Due to lack of scientific mining, minerals are being lifted from shallow depth with most of the deep-buried mineral wealth going waste.

In this context, Ray suggested that OMC be developed into a world-class mining company for scientific mining of resources and its optimum utilization..

OMC, on its part, can supply raw material to the manufacturing units on a demand and requirement basis. To upgrade its infrastructure and technology and meet the raw material demand of the user industry, OMC can tie up with National Mining Development Corporation (OMC) and private mining giants like Dempo, Salgaonkar and Sesa, who already have their expertise in the field.

Citing the examples of several international mining companies like BHP Bilton, Rio Tinto and CVRD, which only supply refined iron ore to major steel manufacturers instead of trying their hands at manufacturing, he said, in Australia minining is completely de-linked from manufacturing of end products.

"Hence it is important that companies and corporations stick to their core business which will help create a level playing field for all".

Ray pointed out that Orissa suffered from poverty amidst plenty syndrome because of lack of a comprehensive mining policy.

"What the state is witnessing today is a mad rush of private entrepreneurs too eager to sign MoUs with the government and take away a slice of mines on the promise of setting up a plant. However, in reality most of them have been using this raw material in their factories outside Orissa with virtually no government control on their activities", he added.

Besides, the process of granting mining leases to big companies on captive basis has landed the state in trouble as some of them competing for a slice of mines have gone to court against the state decisions.

Stating that mining be accorded special industry status, he said, if OMC retains the prerogative to sell the state's mineral wealth on the basis of long-term purchase agreements with an escalation clause to the prospective manufacturers, it can earn huge revenue for the state.