Posco may have to bid for mines to feed Odisha plant

Caught between Odhisa's assurance and the Centre's ordinance for auction, South Korean major Posco's wait for getting mines to feed its 8 mtpa steel plant in the state is likely to be little longer than expected.
As per the Mines ordinance, which paves the way for allocation of all mines through the auction route only, a company has to bid for mines unless it has already got the concurrence of the Centre or a letter of intent from states for mines allocation.
Though Posco has a memorandum of understanding with the Odisha government that assures allocation of mining leases, it perhaps does not possess any letter of intent from the state.

"These commitments should be honoured under the new dispensation. Posco was the largest proposed FDI project in the country for which the Government of India has made an international commitment.
"The nation will be sending a very wrong signal to the international investor community by completely ignoring these international commitments for supporting the raw material requirement of the project," said Odisha's Steel and Mines Minister Prafulla Kumar Mallik here today.
A local Posco official declined to comment.

Participating in a meeting of the state mines ministers on Mines and Minerals (Development and Regulation) (Amendment) Ordinance, 2015 with the Centre, Mallik requested Union Steel and Mines Minister Narendra Singh Tomar "to give a serious thought to this matter".

Later, talking to reporters, Tomar said after the passing of the Ordinance, all mines would be allocated through auction route only and there would not be any allocation through the dispensation route.
"How come the two routes co-exist? ... We need to choose between the two. Ordinance will bring transparency," he said.
Mines Secretary Anup K Pujari said, "If the government's (Centre) prior concurrence has been given or state government has given a letter of intent by whatever name it is called, that does not get affected with the ordinance," he said.
He was not sure about the current status of Posco's case.