Orissa considers signing fresh agreement with Rio Tinto

Orissa government said it was considering a proposal of making a fresh agreement with Australian mining giant Rio Tinto for undertaking mining activities in the state.

This was stated by Orissa's Steel and Mines minister Raghunath Mohanty yesterday while replying to a question in the assembly.

Rio Tinto, which had signed an agreement with the state owned Orissa Mining Corporation (OMC) for exploration of minerals in 1995, however failed to implement the project about a decade ago due to slump in the international market.

A joint venture company in the name of Rio Tinto Orissa Mineral (RTOM) was formed for exploration of 15 million ton iron ore per annum from Gandhamardan and Malangtoli mines, Mohanty said.

As the agreement with Rio Tinto had become defunct, the OMC had moved the Orissa High Court to wind up the RTOM. However, there had been no progress as the matter was subjudice in the HC, the minister said.

"We are considering whether to sign a fresh agreement with Rio Tinto," the minister said.

Raising questions on the state government's move to enter into a fresh agreement with Rio Tinto, a Congress MLA wanted to know how it would be beneficial for Orissa.

Meanwhile, sources in the steel and mines department said that the state government had already prepared a draft for entering into a fresh agreement with the mining major. The draft agreement was under consideration of the law department, it said.

Though the state government through OMC had challenged Rio Tinto's non-implementation of the earlier agreement in the High Court, it was considering a proposal to explore iron ore in order to feed the upcoming steel plants in the state.

However, this time, the new agreement was likely to change the earlier provision of exporting 50% of the iron ore. "If there is a fresh agreement, we will ensure that the OMC-Rio Tinto joint venture meets the domestic demands before exporting the iron ore," a senior official at the department said.

This apart, though OMC would have 49% share in the project, the state owned company could head the joint venture according to the draft agreement.