Bijay Patnaik

Bhubaneswar, July 6: A ray of hope seems to be emerging for the public sector National Aluminum Company (Nalco) as the state government has decided to recommend the Pattangi bauxite mines in its favour.

The aluminium major’s expansion plans hinge on the allocation of bauxite mines by the state. Nalco applied for the Pattangi mines in 1992, but the state government had not made any recommendation in its favour. The Centre had kept these mines with a deposit of 76 million tonnes reserved.

Sources said the state government’s decision to recommend the mines in favour of Nalco was taken at a meeting presided over by chief secretary B.K. Patnaik on Tuesday. The meeting followed Union mines secretary S. Vijay Kumar’s letter to Patnaik urging the state government to settle the Patangi mines in favour of Nalco.

In case of Sasubahu Malhi mines, the application by Nalco was made in 2007. But, no steps have been taken yet to allot the mines to the company.

Significantly, private sector aluminium giant Vedanta was also an applicant for the Pattangi mines. Nalco and Vedanta are also vying for the Sahubouhumali mines. There is a growing perception that while the state government has been scouting for mines for Vedanta following the rejection of its bid to mine Niyamgiri hills by the Union environment ministry, it has consistently neglected the claims of public sector behemoth Nalco. The Telegraph had carried a detailed report on the issue on November 30, 2010.

The state government’s latest move in favour of Nalco comes with strings attached, the conditions being hard to meet. “The state government has, in principle, approved the Pattangi mines in favour of Nalco, but it has attached a number of conditions which is hard for a PSU to fulfil,” said officers.

The conditions, set out by the state government for recommending the Pattangi mines in favour of Nalco, include adequate steps taken for the periphery development as a part of the company’s corporate social responsibility (CSR).

Over the years, Nalco had spent nearly Rs 12,000 crore in Orissa for its alumina project. “If we take the amount keeping present price into consideration, the investment will be around Rs 40,000 crore. The state should consider all these things and expedite the process of leasing out the Pattangi mines to the company,” said a senior Nalco officer.

Sources said Nalco’s expansion plans in alumina and power sector have been stalled as the state government is not pursuing the company’s case seriously.

After Nalco had taken up the issue, the Centre intervened and asked the state to resolve all the cases and recommended in favour of the Nalco project.

At present, the company is procuring bauxite from Panchpatmali in Koraput district. Out of its 310-million-tonne reserves, Nalco has already excavated 120 million tonnes in the past 25 years. “The rest will be exhausted in the coming 10 to 15 years. We badly need other mines to sustain our plant. Mines are also required to continue our expansion programme. The Pattangi mines will solve our problem to a greater extent,” said Nalco officials.

Sources said Nalco also applied for the Gandhamardan mines in 2004.

The other applicants for these mines include Vedanta Aluminium Limited, the Industrial Development Corporation (IDCO) and the Orissa Mining Corporation (OMC). However, there have been no encouraging signs from the government for Nalco, a Navaratna company.