Jai Shankar Tiwary

Ranchi, April 3: Jharkhand High Court today summoned mines and geology secretary Jai Shankar Tiwary to explain why Kohinoor Steel’s application for mining leases has been kept pending.

The court observed that there is no explanation for the delay in deciding about the application for mining lease of the Calcutta-based steel manufacturer.

A high court bench directed Tiwary to be in court on April 15, when the matter will be taken up for hearing.

The court has stopped the government from deciding on applications for granting mining lease before the case was taken up.

Kohinoor Steel is among those companies that had signed MoUs with the government to establish plants in Jharkhand.

As part of the deal, the government was supposed to help the companies get raw materials, among others. When the government was not keeping its end of the bargain, Kohinoor went to court.

Adhunik Alloys, Abhijeet Infrastructure, Monet Ispat and Prakash Industries and Ispat Industries have also filed cases against the state for not providing them the required leases for mining iron ore.

The Calcutta-based steel manufacturer had signed the MoU with the state on July 18, 2005. The government pledged support to help it acquire land, coal block and iron ore mines. In return, Kohinoor agreed to invest Rs 505 crore to set up a plan in phases.

After signing the MoU, the company purchased 35 acres near Chandil and started constructing the factory. By February 2006 the company had finished the first phase of construction and set up a sponge iron plant, captive power plant and a steel melting shop with an induction furnace.

The company also applied for the necessary permits to start production and submitted papers before the mines department for the lease. Kohinoor had applied for mining rights in the iron ore mines in Parambaljori, Barabaljori, Karampada, Setaruiya and Tatiburu in West Singhbhum.

However, the government did not take any decision, resulting in heavy losses for the company.

The petitioner’s counsel said that in the absence of mining rights Kohinoor has to purchase iron ore from the open market, which is expensive, and drained its finances.

Kohinoor was awarded the highest marks at the several hearings conducted by the mines department before allotting mines to prospective bidders. Despite such favourable conditions, mining lease has not been granted only because of the carefree approach of the government, the senior advocate said.