Odisha grants third renewal of Tata Steel's chromite mine

Move to ensure raw material security for company's ferroalloys units

After winning the battle in the Odisha High Court (HC), Tata Steel has got the order of the Odisha government for third renewal of its Sukinda chromite mines in Jajpur district.

The steel & mines department has issued the order for renewal pursuant to the recommendations of a high-level committee chaired by the development commissioner.

Since the Odisha HC had directed to dispose off the matter by November 16, the committee had accordingly recommended the renewal of the mining lease over an area of 406 hectares. The government has accorded lease renewal for 20 years, subject to fulfilment of certain terms and conditions.

“The government has decided for third renewal of Tata Steel's chromite mine. We have issued the order,” said state steel & mines secretary G Srinivas.

The lease, originally granted in 1973, has been renewed twice with the last the latest lease term expiring in January 2013.

Tata Steel’s bid for renewal of the chromite mines was challenged by ferro-chrome maker Indian Metals & Ferro Alloys Ltd (IMFA) and others before the HC. But the HC had dismissed the petitions, saying there was no merit in them. In its judgement dated September 26 this year, the court held that the state government was free to proceed with the steel maker’s application for third renewal.

The actual annual requirement of the chrome ore for the captive plant of Tata Steel is pegged at 0.42 million tonne.

The renewal of the chromite mine is expected to come to the rescue of Tata Steel's Baminpal ferroalloys plant, which was shut down in August because of want of chrome ore, apart from ensuing raw material security for the company’s upcoming ferrochrome units at Gopalpur. Total chrome ore requirement for the two plants proposed there by the steel firm has been projected at 18.42 million tonne for 30 years against a reserve of 19.16 million tonne.

Tata Steel’s Phase-I plant at Gopalpur with a capacity of 55,000 tonne per annum (tpa), is likely to be commissioned during March 2015. The steel major has also decided to set up another unit with a capacity of 240,000 tpa. The government has considered grant of third renewal of the chromite lease under Section 8 (3) of Mines and Minerals (Development & Regulation) MMDR Act, 1957. A mining lease deed is to be executed within six months of the receipt of the government's order by Tata Steel.

The lessee would also furnish in writing, signifying its consent to accept the terms and conditions stipulated in the grant order.

As per the terms and conditions, Tata Steel wold pay royalty and dead rent as provided in the MMDR Act and raise the mineral only for its exclusive use.

The mining lease area would be surveyed and demarcated by the state government at the expense of the applicant as required under Rule 33 of the Mineral Concession Rules- 1960. The applicant is required to deposit the fess towards survey and demarcation within two weeks of receipt of the grant order.

Also, the lessee would reclaim the mined out area to the satisfaction of the state government before the pits are abandoned.