Sesa Goa Served Show-cause In Jharkhand Over Progress ReportsPublished by MAC on 2007-00-17
Source: TIMES NEWS NETWORK
Sesa Goa served show-cause in Jharkhand over progress reports
TIMES NEWS NETWORK
17th APRIL 2007
MUMBAI: The district mining officer of West Singhbhum, Jharkhand, has issued a 30-day show cause notice to iron ore major Sesa Goa for not submitting progress reports on its prospective licence for mines in the resource-rich area in 2005.
The notice asks the company to explain why its licence should not be cancelled for "not following the guidelines." More so, since two years of the three-year licence have expired.
Indicting the company for "inaction", the mining officer has asked it to consider the notice as "a strict warning". The notice adds: "It's clear that you (Sesa Goa) have blocked the specified area and you have no interest in developing it... Your only objective is to have control over the area."
The show cause notice, a copy of which is with ET, was sent to Sesa Goa on April 12. The licence gives the company, the biggest private exporter of iron ore in the country, the right to conduct studies to determine reserves over a 7 sq km area in the district, known for its abundance in natural resources. When contacted, Sesa Goa's managing director PK Mukherjee refused to either confirm or deny the development and declined to comment.
The development comes at a time when the bidding for Mitsui Corp's 51% stake in Sesa Goa has reached the last leg. The iron ore exporter is believed to have iron ore reserves of at least 150 million tonne in Goa, Karnataka and Orissa. "The company's valuation is partly based on Sesa Goa's present reserves of 150 million tonne, which have a 30-year life, and partly on the prospective licence for the ore-rich mines in Jharkhand," said an industry analyst.
Sources close to the development said that Arcelor Mittal, Aditya Birla Group and Vedanta Resources are in the race for the Sesa Goa stake. Though Arcelor Mittal is said to have put in the highest bid, the Japanese trading major is giving equal importance to the share purchase agreements submitted by the other bidders as well.
A decision on the winner is expected to be made "anytime between now and the end of the month", said sources close to the development.
The mining officer has referred to the Mineral Concession Rules, 1960, while sending his three-point notice. According to section 16 (1) of the Rule, a "licensee shall submit to the state government six-monthly reports... disclosing in full the geological, geophysical or other valuable data collected during the period". Sesa Goa, according to the notice, is yet to submit a report.
Neither has the company submitted monthly progress reports nor details of its future plans to develop the area, says the notice. A copy of the show cause notice has been sent to the mines and minerals department of the state, asking it to take "necessary action"