Ordinance may not impact Posco's mining bid

The recently promulgated Mines and Minerals (Development & Regulation) Amendment Ordinance, 2015 is unlikely to hamper Posco's bid to secure the prized Khandadhar iron ore deposits in Odisha, Union mines secretary Anup Pujari indicated.

"You are asking me about a particular case. I need to check the file and then make a decision. If the government's concurrence has been given or if the state government has given a letter relating to that case, then it can be safely assumed that the case will not be hindered by the Ordinance," Pujari said in response to a query on Posco's mining case at the meeting of the central mines ministry on the Ordinance held in New Delhi.

According to Section 10 (2) (c) of the Ordinance, "Where the central government has communicated previous approval as required under sub-section (1) of Section 5 for grant of a mining lease, or if a letter of intent (by whatever name called) has been issued by the state government to grant a mining lease, before the commencement of the Mines and Minerals (Development & Regulation) Ordinance, 2015, the mining lease shall be granted subject to fulfilment of conditions of the previous approval or the letter of intent within a period of two years from the date of commencement of the Ordinance."

Raising Posco's case for mining lease at the meeting, state steel & mines minister Prafulla Mallick said, "Several industries, like Posco, have entered into memorandum of understanding (MoU) with the state government with assurance for allocation of mining leases. These commitments should be honoured under the new dispensation. Posco was the largest proposed Foreign Direct Investment (FDI) project in the country for which the government of India has made an international commitment. The nation will be sending very wrong signals to the international investor community by completely ignoring these international commitments for supporting the raw material requirement of the project."

The Odisha government had recommended grant of prospecting licence (PL) in favour of Posco over Khandadhar lease spread over 2500 hectares (ha) in January 2009, including both notified and non-notified areas. Later when the Centre asked for submission of separate proposals for the two areas, the state government in November last year, submitted the compliance on notified area spread over 2,082.50 ha.

There were more than 200 applicants for Khandadhar iron ore deposits, but the state government had recommended the lease for Posco, citing that it was the biggest FDI and also on ground of value addition. The state government had invoked Section 11 (5) under the previous MMDR Act, 1957 for making the special recommendation for Posco.