JOIN USThe Odisha government has given permission to state-run Odisha Mining Corporation (OMC) to scrap the joint venture projects inked with three private sector heavyweights to go for iron ore and bauxite mining in the state.
The companies are: Anglo-Australian mining major Rio Tinto, Hindalco and the Vedanta group which has now been renamed as Sesa Sterlite.
“We have given permission to OMC to cancel the joint ventures with the three companies if they wish to after the chief minister put his signature on the file in this regard,” state Steel and Mines Minister Prafulla Mallick said on Tuesday.
Sources in the steel and mines department said the OMC decided to do away with the joint venture projects for different reasons.
To begin with, Rio Tinto, though the one billion dollar project to mine iron ore in two reserves in mineral rich Keonjhar and Sundergarh districts was inked two decades back, it had never taken off the ground because of more than one reasons which include a legal tussle.
“As the project has taken so long to start, it is better on the part of the OMC to scrap it,” said a highly placed source in the secretariat, adding that with its financial health improving considerably, the state-owned PSU does not need any joint venture mining project anymore.
At present, the OMC is reportedly having a cash surplus of Rs 5,000 crore in its kitty. At the time of launching of the joint venture project with Rio Tinto in 1995 - then tipped as one of the biggest FDI projects in the mining sector - the financial condition of the state run PSU was not as healthy as it is today.
So far as the joint venture between OMC and Sesa Sterlite to go for bauxite mining in Niyamgiri hills is concerned, the project signed in 2009 had been fighting difficulties because of the local tribals’ agitation against it.
In fact, the Union Ministry of Forest and Environment had already cancelled the final forest clearance for the project following the Supreme Court’s intervention.
The OMC’s joint venture with Hindalco which was inked in 2005 to mine bauxite reserves in tribal dominated Koraput district had also been facing uncertainty because of the local people’s agitation.
With the state government allowing OMC to cancel the joint venture projects with the Sesa Sterlite and Hindalco, the two private sector giants’ aluminium refinery and smelter units in the state are expected to face further problems.
Both companies had set up their units in the state with the hope that the joint venture mining projects would cater to their raw material needs, namely bauxite.
Mallick, however, said that both the private sector majors would be offered to sign long-term linkage plans with the OMC for their raw material needs.