The Orissa government is examining a fresh draft of a proposed agreement with Anglo-Australian mining major Rio Tinto for exploitation of iron ore deposits in the mineral-rich state.
Rio Tinto, the world's second-biggest iron ore producer, had signed a joint venture agreement with Orissa Mining Corporation (OMC) in 1995 for exploration of the Malangtoli iron ore reserves in the state. However, the JV -- in which Rio Tinto was to hold a stake of 51 per cent and OMC the remaining 49 per cent -- failed to be operationalised.
"Draft for a fresh agreement is being examined by the Departments of Law and Finance. However, I can't say anything at this stage whether it (agreement) will fructify or not," Orissa Industries and Steel and Mines Minister Raghunath Mohanty told PTI in a telephone conversation.
A decision on the issue will be taken only after a final report is submitted to the ministry, Mohanty said. "But right now, I can't say yes or no," he clarified.
Last month, a Rio Tinto official had said in Kolkata that the agreement is being re-negotiated and is awaiting government approvals.
"In 1995, we had the main agreement for pre-feasibility work with OMC. The subsequent agreement is being re-negotiated and is waiting for government approvals," Rio Tinto India General Manager (Iron Ore) Siddharth Jain said.
Iron ore is a key raw material for steel-making and demand for steel is expected to grow in double digits in the country, with plans to ramp up investment in the infrastructure sector to $1 trillion in the 12th Five-Year Plan (2012-17).
"We are very keen to have iron ore operations in India," Jain had said.
The country's metal and mining companies have found it difficult to expand apace with rising demand owing to stiff opposition from displaced locals and the slow process of getting statutory approvals, besides stringent environmental norms.
Some mining and steel majors like Vedanta and Posco are facing problems in Orissa. Last year, the Environment Ministry refused forest clearance for UK-based Vedanta's proposed aluminium mining project in the Niyamgiri Hills, besides another mining project by South Korea's Posco, which was billed as the biggest investment ever attracted by the state.
