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FIMI to move SC against HC order on iron ore sale

All Odisha Steel Federation (AOSF), a body of steel units had welcomed the government notification and gone to the court seeker stricter implementation of the administrative order

Sadananda Mohapatra  |  Bhubaneswar 

Federation of Indian Mineral Industries (FIMI) today said, it would move the Supreme Court against the Orissa High Court order upholding the state government notification of compulsory sale of iron ore in domestic market.

“The interpretation of high court regarding Mineral Concession Rule (MCR) is not correct. We will go to Supreme Court against the decision of the high court as we feel the notification is invalid,” said R K Sharma, secretary general of the mining lobby body.

On December 5, 2012, the Odisha steel and mines department had issued notification directing all miners to reserve half of their monthly iron ore output for sale in domestic market after captive consumption citing mineral development and other rules contained in the MCR as well as raw material need for local steel as the cause for such action.

Many miners had moved high court challenging the legal validity of the notification. But All Odisha Steel Federation (AOSF), a body of steel units had welcomed the government notification and gone to the court seeker stricter implementation of the administrative order.

The move of the state government to reserve the minerals in favour of local steel units had, however, drawn flak from the Centre. Terming the restriction of mineral sales a breach of the Constitution, the Centre had stated that such a norm could be introduced only through appropriate legislation or amendment in the existing law.

Hearing on writ petitions filed by AOSF and FIMI, the high court on Wednesday said, the government has the right of pre-emption on minerals as mentioned in the section 27 of MCR and hence the notification was legally valid.

FIMI said, such interpretation of the MC rules can be used under special circumstances.

“Section 27 can not be invoked outright. It can be used as a last ditch effort,” said Sharma.

According to section 27 (1) clause (m) of MCR, “the state government at all times have the right of pre-emption of the minerals won from the land in respect of which lease has been granted, provided that fair market price prevailing at the time of pre-emption shall be paid to the lessees for all such minerals.”

The HC said, if the state government fails to come up with a mechanism to distribute the minerals among domestic steel units at fair market prices, then the December 2012 notification would get lapsed within three months.

While admitting that the verdict has gone against their interest, the miners are pinning their hopes on the riders mentioned in the judgement regarding pricing. However, they were sceptical that an effective and profitable pricing mechanism would be formulated soon.

“How can the state government fix prices for minerals when it is always decided by the supply and demand scenario,” asked a miner based in the state.

The state government has already formed a ministerial committee to formulate policies for raw material linkage to metal industries of the state. It was even mulling to canalise the mineral trade, by asking miners to sell their produces under one platform. However, the policies are yet to be made public.

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First Published: Thu, April 03 2014. 20:20 IST