The Telegraph
Since 1st March, 1999
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Centre probe into govt Posco prod

Bhubaneswar, Jan. 7: The state government has found itself in a tizzy as the Centre has made some probing queries on the recommendation by the former to grant prospecting license for iron ore to south Korean steel giant Posco.

The government had on December 19 recommended to the Union mines ministry to grant prospecting license for iron ore over an area of 6204.352 hectare in Kensara, Bhutuda, Rantha, Batagaon, Soreikela, Lusi and Raisuan villages under Sundargarh district for a period of two years.

In fact, the government had requested the Centre to relax the provisions of Section 6(1)(a) of the Mines and Minerals (Development and Regulation) Act, 1957, which stipulates a maximum of 25 sq km area for the grant of prospecting license.

In the interest of the development of iron ore in a more systematic, scientific and efficient manner, the above provisions may be relaxed by invoking “special” provisions under section 11(5) of Mines and Minerals (Development and Regulations) Act, the government had pleaded in its letter to the mines ministry.

The “special” reasons cited were that Posco was the largest foreign direct investment in the country and the strong financial resource base of Posco, the world’s third largest steel producer with a capacity of over 30 million tonnes and annual turnover of $21.4 billion, would assure the successful implementation of the mega steel plant project in the state.

Besides, the South Korean company has 25 years of experience in development of minerals and its value adding effect would be maximum in comparison to other applicants, the government had argued.

After completion of the project, it would provide direct employment to about 13,000 people and indirect employment to another 35,000.

Earlier, Posco had applied for the prospecting license and mines lease after it signed an MoU with the government on June 22 last year for the establishment of a 12 million-tonne steel plant at Paradip with a proposed investment of Rs 51,000 crore.

Prior to the Posco’s application, several companies, public sector undertakings and other individuals had filed mineral concession applications over the same Khandadhar iron ore mines area.

However, the government had sent its recommendations in favour of Posco citing the “special reasons”.

However, not satisfied with the government’s pleas, the Centre has recently sought clarifications over the issue.

It wanted to know whether any gazette notification was issued inviting applications for the recommended area and asked the state government to send a copy of the notification, if any.

The Centre also wanted the total number of the applications received for the recommended area and a copy of the rejection order passed by the state government rejecting the applications of other applicants.

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