Rio, Orissa firm in talks to settle mining dispute

Rio Tinto, the world’s second largest mineral resource company, and Orissa Mining Corporation (OMC), are in talks to bury the hatchet over the 800-million tonne Malangtuli iron ore joint venture in Orissa. Rio Tinto holds 51 per cent in the JV, while OMC owns 44 per cent and government-owned NMDC has a 5 per cent stake.

Rio Tinto India Managing Director Nik Senapati said, “We are in active discussions and are hoping that the issue would be resolved sooner or later.” Rio is awaiting recommendations from a task force, which was set up last year under the aegis of the chief secretary of the Orissa government to resolve the issue.

OMC and Rio Tinto had set up the joint venture in the late 1990s, but it is mired in litigation over iron ore deposits and other issues. OMC contends that the joint venture has ceased to exist and is also against export of a bulk of the iron ore deposits. The mines were even offered to other companies.

The original plan was to export a significant portion of the iron ore. When asked whether the JV would modify the plan in the wake of the government not encouraging iron ore exports, Senapati said, “We are in discussions. That’s all we can say.” He also declined to comment on the Malangtuli reserves.

NMDC Chairman and Managing Director Rana Som said, “We had done exploration work in the deposit area, which was converted into equity. We are waiting for the discussions between Rio and OMC to be over.”

Had the project taken off, it would have increased the availability of iron ore in the domestic market. India has about 23.59 billion tonnes of iron ore in Jharkhand, Orissa, Chhattisgarh, Karnataka and Goa. Of this, only 6.311 billion tonnes are proven reserves, while the rest may be probable and possible reserves. Of the total, 10.68 billion tonnes comprise magnetite ore, 75 per cent of which are in the ecologically- and environmentally-sensitive Western Ghat region.

Meanwhile, in a separate development, Rio Tinto entered into a memorandum of understanding (MoU) with NMDC in August this year for developing mines in the domestic and international markets. As a part of the MoU, a joint working group has been formed to scout for deposits.

Besides Malangtuli, other deposits in Orissa and Tamil Nadu have been on the radar of the joint working group. “There are some low-grade iron ore deposits in Tamil Nadu and Rio Tinto’s geologists are scanning the state for them,” said Som.