The Telegraph
Since 1st March, 1999
Email This Page
Neighbour chokes IISCO ore lifeline

Oct. 6: The debate over division of natural resources bubbled back to the fore today with Jharkhand deciding not to renew the iron ore mining lease of Indian Iron and Steel Company (IISCO) based in neighbouring Bengal.

IISCO, whose survival depends on the ore from Jharkhand, operates 10 mines in the state. Barring two mines, whose lease will expire in 2005, the company runs the risk of losing the eight other mines immediately if the Jharkhand government sticks to its decision.

The Jharkhand government said all state-based mines where IISCO is carrying out mining operations will automatically revert to state control.

A room for manoeuvre has been left open, though. The Jharkhand government has told Steel Authority of India Ltd (SAIL), which has been assigned to bail out IISCO through a merger, that renewal of its mining lease would depend on the extent of value addition in Jharkhand.

SAIL has been told that since Jharkhand supplies the lion's share of iron ore to the steel giant, the state should be the largest beneficiary in terms of value addition. The steel major has mining leases at Kiriburu and Hataburu in Singhbhum district.

Jharkhand appears to be following the Orissa model perfected by the Naveen Patnaik government, which recently renewed mining licences only after wresting a promise of investments from those carting away natural resources.

If that is what the Jharkhand government means by 'value addition', a solution could be thrashed out before the situation spins out of control for IISCO.

'It is very unfortunate that when the company was just looking up for revival, this kind of roadblocks are coming. If the mining leases are not renewed, that will be the last nail in the coffin of IISCO,' an industry analyst said.

Jharkhand officials said though IISCO now mines around 1 million tonnes of ore from the state, its 10 facilities have huge reserves that a prospective saviour like SAIL could put to good use.

One of the 10 iron ore mines is in Chiria, the second-largest of its kind in the world. The quality of the Jharkhand ore is also rated high.

Jharkhand mines and geology director I.D. Paswan told The Telegraph that the refusal to renew the lease is not a new policy decision. The government is only implementing the industrial policy of 2001 which says top priority should be granted to lease applicants who could guarantee value additions within the state, he said.

'It is ridiculous to allow companies to ship ore from Jharkhand and carry out industrial operations in other states,' Paswan added.

He said IISCO's lease for most mines had expired around two decades ago and no fresh application was made. IISCO officials were not available for comment.

Email This Page