Centre Turns Down State's Plea on Khandadhar Mines

Posco will have to secure the iron ore mines by bidding, says Steel and Mines Minister

Published: 10th April 2015 06:00 AM  |   Last Updated: 10th April 2015 06:00 AM   |  A+A-

BHUBANESWAR: The Centre has refused to reconsider the State Government’s request for grant of prospecting licence (PL) for Khandadhar mines in Sundargarh district to Korean steel major Posco.

The State Government had written to the Union Mines Ministry to allot Khandadhar iron ore mines in favour of Posco, instead of putting them on auction as per the Mining and Minerals Development and Regulation (MMDR) Amendment Act.

center.JPGHowever, the Ministry has made it clear that it is not possible to offer the Khandadhar mines to Posco on preferential basis and this chapter is now closed. It will have to secure this mine by bidding, Minister of State for Steel and Mines Prafulla Kumar Mallik said on Thursday.

Sources in the Steel and Mines Department said the fate of granting Khandadhar iron ore mines to Posco on dispensation route was sealed after Parliament passed the MMDR Amendment Bill. Once a regulatory mechanism is put in place, it is not possible to give preferential treatment to a particular company. All private firms have to participate in the auction process, sources added.

Earlier, Union Steel and Mines Minister Narendra Singh Tomar had also made it clear that the South Korean steel maker will have to bid in the upcoming auction to get an iron ore mine for its $12 billion-steel project at Paradip.

Chief Minister Naveen Patnaik had taken up the contentious issues of granting Khandadhar iron ore reserve in favour of Posco and bauxite linkage to Vedanta Group’s refinery plant at Lanjigarh in Kalahandi district during Tomar’s visit  last year. Besides, the Chief Minister had taken up the issue with Prime Minister Narendra Modi in New Delhi.

The State Government had requested the Centre to honour its commitments on the basis of the earlier MoU signed for providing raw material to Posco. Failure to honour the commitments made in the past would send wrong message to international investors, the State had said.

The Centre had then clarified that mines can be allocated through dispensation route in case it had already given concurrence or the State Government issued a letter of intent in favour of Posco. But this is not the case with Posco.

Though the State Government’s MoU with Posco had expired in 2010, it has not been renewed.

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