Sensing an opportunity to corner the Odisha government after it decided to cancel the joint venture pact of Odisha Mining Corporation (OMC) with a private firm for coal mining over rule violation, the state Congress unit on Monday demanded that OMC’s agreement with Vedanta for bauxite supply should also be scrapped.
“The Vedanta-OMC deal for bauxite supply agreement was illegal as we have been saying earlier. Now that the government has realised its mistake and scraped OMC-Sainik coal mining deal, it must take steps to cancel its agreement with Vedanta,” Srikant Jena, a senior Congress leader and a Union minister told news persons here.
In 2009, OMC had formed a JV called South West Bauxite Mining Company (Pvt.) Ltd with Sterlite Industries (India) Ltd, a Vedanta group company, with 74 per cent stake owned by the latter. As per the JV agreement, Sterlite was to invest in excavation of the mineral and in turn, procure bauxite at a fixed price.
However, the project is yet to take off as OMC is battling with Union Ministry of Forest and Environment (MoEF) at the Supreme Court following cancellation of stage II forest clearance and withdrawal of environment clearance for the Niyamgiri mines in Kalahandi district.
The JV has been widely criticized by civil societies and NGOs for violating the rights of tribals residing near Niyamgiri hill, which was leased out to OMC for extracting bauxite.
Meanwhile, Vedanta has warned the state government about shutting down its refinery from December 5 this year for lack of bauxite ore. The company has posted heavy losses due to import of the raw material and would no longer be able to run the plant if the government does not come up with alternative supply plan.
Also Read
The Congress leader said despite all the legal and political hurdles, the state government should show some willingness to scrap the deal as the agreement of sale of bauxite at a fixed price is illegal when in international markets the prices are ruling high. Also, the state exchequer would be devoid of huge revenues if the government goes ahead with its plans, he added.
“If the government has started auctioning chrome ore and is planning to start iron ore auction, then why cannot it start auctioning bauxite ore?” asked Jena, who is the Union minister of state for fertilizer and chemical, statistics and programme implementation.
“I will request the Union mines minister to order a probe to find out how much Vedanta and Sainik benefited (by way of raising money from markets) because of their agreements with the state government for development of the mines,” he said.
The state government last week scrapped the JV between OMC and Delhi-based coal miner Sainik Mining Private Ltd after repeated reminders from the Central coal ministry questioning the shareholding pattern of the venture. In the venture, named as Kalinga Coal Mining (Private) Ltd, Sainik had controlling stake, which was a violation of Coal Mines (Nationalisation) Act, 1973.