Odisha in talks with Centre for grant of iron ore mine to Posco

The state government today said it is negotiating with the Central government about granting an iron ore lease to Posco, after the recently introduced Mines Minerals Development and Regulation (MMDR) Bill, 2015 was ratified by the Parliament, doing away with the process of preferential allotments of mining leases. "Posco will have to take part in the auction process as per the new law. But since we had committed to the company that it will be provided an iron ore lease to set up its steel plant, we are currently negotiating with the Union government about how the matter can be resolved without violating the laws," said Prafulla Kumar Mallick, state steel and mines minister.

"If Posco is denied the right of preferential allotment, then it will affect international commitments of the country," he further added.

In the MMDR ordinance, there was a provision to allot the mines on auction basis, like coal. The ordinance, which was approved in both the lower and upper houses of the Parliament last week, was also backed by Biju Janata Dal (BJD).Earlier, the BJD-ruled Odisha government had warned to drag the matter to the courts, if Centre did not heed to its concerns over the provision in the new law allowing automatic renewal of mining licence for captive and non-captive leases till 2030 and 2020 respectively.

But later it made an about turn in its stance and supported the Bill in the Parliament. Experts said, since the BJD has backed the Bill in the Parliament, the Centre might take a considerate view on the demands of the state leading to some workable solution on the pending issues such Posco.

"Since the BJD supported the MMDR bill, it seems they have reached an agreement about Posco," said Manas Dasmohapatra, a senior lawyer of Odisha High Court.

In January 2014, the state government had recommended an iron ore prospecting license in favour of Posco. The Centre has asked it to review the recommendations due to dispute over some areas. Though Odisha has again sent back its recommendation on a revised area in favour of the steel maker, no decision has been taken on it so far.

Posco has committed to build an eight million tonne per annum steel plant in the state in the first phase. Land acquisition for the plant site is almost complete.