Odisha defends reservation of mines in favour of OMC

Ministry in February had disapproved resolution saying it does not conform to mining laws

The state steel & mines department has written to the central mines ministry defending its policy resolution to reserve mineral bearing areas in favour of its PSU, Odisha Mining Corporation (OMC).

The state government’s defence is in response to the ministry’s letter in February this year, wherein it had disapproved the resolution, saying it does not conform to mining laws.

“The state government cannot reserve any area not already held under any prospecting licence (PL) or mining lease (ML) for undertaking prospecting or mining operations through a government company or corporation owned or controlled by it, unless it has the approval of the central government as laid down in Section 17 (A) (2) of Mines and Minerals (Development & Regulation) Act-1957. The decision to reserve the area in question in favour of OMC without seeking approval of the central government is not in consonance with Section 17 (A) (2) of MMDR Act,” Rokhum Lalremruata, director, Union mines ministry had written to the Odisha steel & mines secretary earlier.

But the state government has shot back, arguing that its September 18, 2012,  is in consonance with the provisions of Mines and Minerals (Development & Regulation)-MMDR Act, 1957. Through its resolution dated September 18 last year, the state government sought to reserve all balance mineral bearing areas of the state not already held under any PL or ML or in favour of OMC.

“It may be mentioned that the rationale for taking such a policy decision has been clearly stated in the resolution itself. The state, being the owner of the mineral resources, has to ensure that the mineral resources are applied for the overall development of the community. Such ownership also carries with it the right to reserve any mineral bearing area of exploitation in the public sector. In case of finite and non-renewable resources, exploitation by the state or its agencies is the most effective method of conservation and prudent exploitation,” S K Popli, special secretary (steel & mines) wrote to Lalremuata.

While standalone mining does not contribute much to the betterment of the community, reservation in favour of PSU will serve the common good, he stated.

Reservation of mines for OMC would ensure fair and equitable distribution of minerals amongst the user agencies whereas in case of standalone mining, all benefits accrue to the profit maximizing entrepreneurs, the letter said.

Popli said, it has been specifically mentioned in para 11 of the resolution that the Central government would be moved to accord approval for reservation as required under sub-section (2) of Section 17 (A) of MMDR Act, 1957.

He also cited the Supreme Court order dated July 26, 2012 in the case of Monnet Ispat & Energy which held that such approval can be obtained by the state government after exercise of power under Section 17 A (2) and that the approval under the section cannot be equated with prior approval of Central government.

Reservation under Section 17A (2) can be made until the area is actually leased out to an applicant under Section 11 of the Act.