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Centre’s no to state curbs

Dillip Satapathy & Jayajit Dash  |  Kolkata/ Bhubaneswar 

Three resolutions of the Odisha government to impose unprecedented curbs on mining activity and triggering a legal tussle between the government and the mine lessees have come across a central government wall.

The ministry of mines has asked it to scrap all the three resolutions, saying they breach mining laws. Through these resolutions, the state steel and mines department sought to achieve a three-pronged objective. One, reserving all the remaining mineral-bearing areas (not leased to any private entity) in favour of its company, the Odisha Mining Corporation (OMC). Two, making it mandatory for standalone iron ore miners to sell at least half their output to state-based industries. Three, restricting the area of a private lease at the time of renewal.

The string of resolutions, which industry watchers believed were to appease the Shah commission probing cases of illegal mining, had sparked considerable resentment within the mining industry. Rokhum Lalremruata, director, mines ministry, has sent three separate letters to state steel & mines secretary Rajesh Verma.

Referring to the first resolution of the state government dated September 18 last year, Lalremruata said, “The state government cannot reserve any area not already held under any prospecting licence or mining lease for undertaking prospecting or mining operations through a government company or corporation owned or controlled by it, unless it has the approval of the central government as laid down in Section 17 (A) (2) of the Mines and Minerals (Development & Regulation) Act, 1957. The decision to reserve the area in question in favour of OMC without seeking approval of the central government is not in consonance with Section 17 (A) (2) of the Act.”

Accordingly, the state government is advised to decide all pending applications in line with the MMDR Act and rules under it, the letter stated.

Similarly, the ministry has objected to the resolution of the state steel and mines department dated December 5 last year. This had imposed a condition, making it mandatory for mine lessees without end-use plants to sell at least half their extracted iron ore to state-based consuming industries.

“The decision...cannot be invoked by application of Rule 27 (1) (m) of the Mineral Concession Rules, 1960, under the pretext of right of pre-emption. The right of pre-emption can be enjoyed only by the state government and such a right cannot be transferred, as in the instant case, to mineral-based industries in the state,” the letter said.

Terming the restriction a breach of the Constitution, the letter stated that such a restriction can be introduced only through appropriate legislation or amendment in the existing law.

The other resolution of the state department, dated October 3, 2012 aimed to restrict the area of a mining lease at the time of a renewal to the extent of captive requirement only, except in case of leases held by a central or state sector undertaking. The resolution said the excess area so identified was too be reserved for OMC.

The central ministry said doing so without prior approval of the central government was a breach of Rule 27 (3) of the 1960 rules referred to earlier.

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First Published: Mon, February 18 2013. 00:45 IST
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