Odisha to seek iron ore lease for Posco citing global commitment

A provision of lease grant on auction basis has been introduced in the newly-introduced MMDR Amendment Ordinance 2015

A day after Union Steel and Mines Minister Narendra Singh Tomar said Posco has to take part in the auction process for obtaining a mining lease, the Odisha government said, the Centre is backing away from its earlier stance of granting a mining lease for Posco on preferential basis.

“In the recent workshop conducted by the Union ministry of mines for clarification related to MMDR ordinance, they had agreed to the proposal of granting an iron ore lease in favour of Posco. But now the minister’s statement shows the Centre is backing away from that position and it is unfortunate. We will certainly raise this issue after consultation with the chief minister,” said Prafull Mallick, state steel and mines minister.   

In the newly introduced Mines Mineral Development and Regulation (MMDR) Amendment Ordinance 2015, the provision of preferential grant of mining lease has been struck out and instead a provision of lease grant on auction basis has been introduced. “Even I will have to bid to get a mining lease,” Tomar said on Thursday, ending uncertainty over what will happen to the Odisha government’s recommendation for grant of prospecting license (PL) for Khandadhar iron ore mines to Posco.

The Odisha minister expressed his displeasure over the Union minister’s statement citing that the Centre must keep its international commitments. “The Centre should accept state’s recommendation and fulfil its international commitment, otherwise it will affect the image of the state and the Centre in attracting new investments. As the recommendation in favour of Posco was made much before the Centre’s ordinance on auction of mines, the Centre should spare the foreign investor from the bidding process,” Mallick said.

If needed, the state government would take legal action to keep its promises, he added.

Though the new ordinance has provision for auction of mines leases, another clause in it mentions that written recommendations of a state government prior to the ordinance for grant of a lease shall be considered for mines lease grant.

In January 2014, the state government had recommended for grant of PL in favour of Posco. The Centre has asked it to review the recommendations due to dispute over some areas. Though Odisha has sent back its recommendation of a revised area in favour of the steel maker, no decision has been taken in this regard so far.

Posco has committed to build a 8 million tonne per annum steel plant in the state in the first phase. Land acquisition for the plant site is almost complete.