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LATEST NEWS UPDATES | Orissa moves SC, challenges HC decision on Posco mining issue by Indu Bhan

Orissa moves SC, challenges HC decision on Posco mining issue by Indu Bhan

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published Published on Oct 30, 2010   modified Modified on Oct 30, 2010

The Orissa government on Friday moved the Supreme Court challenging the Orissa High Court order that quashed its decision to permit South Korean steel major Posco to mine iron ore in Sundergarh district of the state. The matter is likely to come up for hearing in November end.

The state government had recommended the grant of prospecting licence (PL) to Posco India for the Khandadhar mines for its 12-million-tonne steel plant near the port town of Paradip with an investment of $12 billion — the largest foreign direct investment in India.

“It is the responsibility of the Centre to see that such a major project takes off,” Orissa chief minister Naveen Patnaik said, adding, “As you know, it is the biggest FDI in the country.” Posco plans to build a $12-billion, 12-million tonne steel plant in the state. Patnaik was reacting to Prime Minister Manmohan Singh’s meeting with South Korean President Lee Myung-Bak on Friday.

“We have filed the SLP challenging the high court order which observed that there has been violation in the Mines and Minerals (Development & Regulation) Act, 1957 while recommending the Khandadhar mines in favour of Posco,” said Orissa steel & mines minister Raghunath Mohanty.

The high court, while setting aside the recommendation of the state government for allotting PL to Posco over 2,500 hectare in the Khandadhar hills on July 14, had also asked it to conduct a fresh hearing of all the 226 applicants for the Khandadhar mines.

The world’s fourth-largest steelmaker’s Rs 51,000-crore mega steel project near Paradip has already been delayed by five years and has been mired in land acquisition problems. The project was scheduled to be set up by 2016, but has been delayed due to various factors, including protests by local residents against acquisition of their lands.

It had been alleged that the allotment of the iron ore mine not only violated the forest and environment policy, but would also hamper the ecological system of the locality.

The high court decision results from a petition filed by Geomin Minerals and Marketing, one of aspiring firms for the Khandadhar mines, alleging that it was not considered for the mines though it had made the first application for a mining lease in the area in August 1991. It also alleged that the state government had picked up Posco’s application from the 226 applicants for the mining lease, invoking the provisions of Section 11(5) of the Mines and Minerals (Regulation & Development) Act 1957.

While the state government had recommended the licence in December 2006, under which Posco India would get 6204.352 hectares of Khandadhar mines, central sector miner Kudremukh Iron Ore Corporation challenged the recommendation in court. KIOCL, which had carried out prospecting of the mines, claimed that it had the first right over the mines.

The Centre, in July 2007, however, rejected KIOCL’s recommendation and directed the state to grant the mine only after hearing all the 226 applicants for the mines. The state again recommended the mines in favour of Posco India in January 2009. This time, the state government reduced the area by 50% to 3,000 hectares, excluding the area claimed by KIOCL.

Khandadhar mines promises a reserve of 300 million tonne of high grade iron ore. Besides KIOCL and Geomin Minerals, there were several other applicants, including Essar Steel, Jindal Photo, Jindal Strips, SSL Enegrgy, MSP Metallics, Mesco Kalinga Steel, Adhunik Metalliks, Uttam Galva Steel, Bhusan Power & Steel.


The Financial Express, 30 October, 2010, http://www.financialexpress.com/news/Orissa-moves-SC--challenges-HC-decision-on-Posco-mining-issue/704618/


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