Steel units to get 4.2 mnt iron ore from private miners

JSPL, Essar Steel among 25 beneficiary units

Steel industries operating without iron ore leases or firm linkages at last have a reason to cheer. The units have been allotted 4.2 million tonne of iron ore by the end of this fiscal to run their units starved of the raw material.

The allotment is for the January-March quarter of the current fiscal.

The allotment of iron ore is being done as per the December 5, 2012, resolution of the state government. Through this resolution, the government sought to make it mandatory for mine lessees without end-use plants, to sell at least 50 per cent of their extracted iron ore to state based consuming industries. Its implementation got delayed as the matter was locked up in litigations until the Odisha High Court finally gave its ruling in favour of the government in April this year.

“This is a major victory for all the state based steel industries. After two years of the resolution, it has been finally implemented. We have been fighting for this cause and at last our hopes have been realised,” said Purushottam Kandoi, president, All Odisha Steel Federation (AOSF), a body representing the interests of the steel units.

Kandoi said, the remaining steel units can hope to be included in the next iron ore allotment chart.

The steel industries to benefit from the allotment are Jindal Steel & Power Ltd (JSPL), Essar Steel, Brahamani River Pellets Ltd (BRPL), Bhushan Steel, SMC Power Generation and Pattnaik Steel & Alloys Ltd to name a few.

The iron ore would be supplied from mines of standalone miners — Sirajuddin & Company, Indrani Patnaik, MGM Minerals Ltd, Rungta Sons Ltd, Prabodh Mohanty, Penguin Trading & Agencies Ltd and Essel Mining & Industries Ltd.

It may be noted that the state government’s resolution was struck down by the Union mines ministry. The decision of the Odisha government asking the miners to sell at least 50 per cent of their iron ore output to mineral-based industries in the state cannot be invoked by application of Rule 27 (1) (m) of Mineral Concession Rules (MCR)-1960 under the pretext of right of pre-emption, the mines ministry held. Terming the restriction as a violation of the Constitution, the ministry said, such restrictions can be introduced through appropriate legislation or amendment in the existing legislation.

However, the Odisha High Court (HC) in its order in April this year had upheld the state government’s notification for the standalone mining companies to sell at least half their extracted ore to industries not having mines in the state.

The AOSF represented by PL Kandoi, had filed a writ petition in the HC, making a prayer for implementation of the state government's resolution and to ignore the Centre’s direction. But the Federation of Indian Mineral Industries (FIMI) and few others had made a reverse prayer to declare the state’s notification as illegal in view of the Centre’s direction. FIMI’s petition was struck down by the court.