State reiterates demand for reservation of mines in favor of OMC

Published: 03rd August 2013 11:23 AM  |   Last Updated: 03rd August 2013 11:44 AM   |  A+A-


The Odisha Government has reiterated its demand before the Centre that mineral-bearing areas be reserved in favour of the State-owned Odisha Mining Corporation (OMC) on the grounds that it will serve the community better.

The State’s insistence comes following  the Ministry of Mines disapproval of  the proposal last year when the former had passed a resolution in this connection.

The  move is seen as a plan to pre-empt any flak the State may receive once the Shah Commission report is placed before the monsoon session of  Parliament as it will have the grounds to say that it has taken measures to streamline the mining sector.

“Standalone mining does not contribute much to the betterment of the community whereas reservation in favour of public sector undertaking will subserve the common good,” the Steel and Mines department has conveyed to the Ministry of Mines in a fresh letter.

The OMC will be able to make fair and equitable distribution of minerals among the user agencies for higher value addition. When resources are exploited by the PSU, the Government earns higher revenue through not only payment of royalty, but also dividend, contributions for the corporate social responsibility and peripheral development, the letter said.

The rationale behind last year’s policy decision was based on the Constitution which provides for such an arrangement, the State Government said. Odisha Mining Corporation of the Constitution requires the State to direct its policies towards securing the ownership and control of the material resources of the community so that they are distributed to serve the common good.

“The State being the owner of the mineral resources has to ensure that the same is applied for the overall development of the community. Such ownership also carries with it the right to reserve any mineral bearing area for exploitation in the public sector,” the letter said. This will lead to conservation and prudent exploitation and help preserve the minerals for posterity, it added.

The Government said the State is empowered under the Mines and Minerals (Development and Regulation) Act, 1957 to obtain approval for such reservation and the Supreme Court had issued a direction to this effect last year.

The power under the MMDR Act is statutory and there could be no estoppel against its exercise by the State. Reservation under the provision can be made until the area is actually leased out to an applicant, it added. The State Government said it would move the Centre for its approval on the matter despite the fact that the latter had disapproved such reservation of mining area in favour of OMC advising that all pending applications be decided as per the MMDR Act.

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