Tata Steel violated norms: Jharkhand

Chaibasa mines officer says Tisco selling 55% ore to others without govt approval.

Tata Steel has been charged with violation of mining lease norms in Jharkhand and is facing a possible cancellation of a part of its lease.

The district mines officer of Chaibasa, in a letter, dated June 17, to the state's secretary, mines and geology department, had cited Tata Steel's accounts of March 2005 to point out that the company was selling 55 per cent of the iron ore from its captive mine at Noamundi to others. The entire ore was meant for the company's own consumption.

Tata Steel "has violated its statutory declaration" says the letter, given to the state government, on the basis of the March 2005 returns filed by the company. It says the company had not obtained approval of the government to sell iron ore.

Further, the Chaibasa mining officer had recommended that Tata Steel be given a chance to respond under the provisions of the Mines and Minerals Development and Regulation (MMDR) Act 1957, section 4A.

His own belief, however, was that the iron ore reserve in the mine was considerably more than what Tata Steel needed. Therefore, the letter says, this lease should be cancelled and readvertised.

A Tata steel spokesperson confirmed the sale of iron ore. "A letter in this regard has been received by the company and Tata Steel would reply accordingly. Tata Steel was selling iron ore, but only fines and, with the company's future expansion plans in place, the company will progressively reduce its selling in the open market in years to come," he said.

A mining industry expert said that 'many steel companies have been exploiting the government's laissez-faireism policy by producing iron-ore far in excess of their requirements and making money by selling the ore in the open market'.

The expert explained that most of the iron-ore is sold to traders, who further rake in moolah by exporting a chunk of it and selling the remaining in domestic market.

Industry observers maintain that selling iron ore in open market defeats the very concept of captive mining, which in literal sense means that if the area is sanctioned as captive mining, then no produce from the sanctioned area should be sold in the open market.

Tata Steel's Jamshedpur plant's capacity is to be increased to 7.5 million tonne by 2007-08. The expanded capacity will push up Tata Steel's Jamshedpur plant's raw material requirement to 23 million tonne by 2007-08, of which iron ore alone will be about 12 million tonne.

Tata Steel has captive iron ore mines at Joda, Khondbond and Noamundi.

Noamundi Iron Ore Mine is an operating open pit mine, which mainly produces iron ore. Established in 1925, Noamundi is one of the biggest and fully mechanised iron ore mines in Jharkhand and is certified under Environment Management System ISO 14001: 1996 standards.