MAC/20: Mines and Communities

Updates on mining in India

Published by MAC on 2005-10-24


Indian policy towards both its national and foreign mining companies seems all at sea - at both central and state levels.

Orissa asks Posco to tag local ally

Ishita Ayan Dutt / Kolkata India Press

October 24, 2005

The Orissa government has thrust on Pohang Steel Company (Posco) India a clause of inducting an Indian company for mining.

Although unwritten clause is not part of the memorandum of understanding (MoU), the state government has asked Posco to rope in an Indian company for partnering its mining project.

Tae-Hyun Jeong, deputy managing director and head of Posco's India project, said the Orissa government has said that the company would have to partner with an Indian company, adding, that this was the reason why Posco could not enter into a joint venture with Australian mining major, BHP Billiton.

Posco, Jeong said, was in the process of shortlisting potential partners for mining at the site and in fact had zeroed in on BHP Billiton when the state government's clause was intimated to the company.

He said, there were 7-8 companies in mind, many of which were were interested in the project. The mining project entailed acquisition of 600 million tonne of mining leases for captive use.

Jeong clarified, that this was at the insistence of the state government and not the central government. Accordingly Jeong was chalking out plans for the mining venture. The estimated investment cost was around $500 million for the first stage. Posco would enter into joint venture for the exploration.

The company had applied for prospecting license would then acquire exploration licence. The final stage would the mining lease stage. The 12 million tonne project was estimated to cost $12 billion. Jeong said, the company was not expecting any returns in the first 15 years.

He said, the company decided to invest in India as it believed that it was a high-growth market. Jeong said, initially the company would focus on manufacturing of slabs.


POSCO seeks continuance of controversial agreement

Financial Express

New Delhi October 18

The Indian subsidiary of Korean steel major, Pohang Steel Company (Posco), will seek continuation of controversial iron ore export clause when it signs final agreement to set up its 12 million tonne steel plant with the Orissa government sometime next year.

Talking to FE, Posco India deputy managing director Tae-Hyun Jeong said that this was necessary as iron ore in Orissa traditionally had high levels of alumina unsuitable for use in blast furnace.

"In any case, iron ore exports from our captive mines will take place only after we import better quality of ore in similar quantities here for blending".Mr Jeong said adding, that ore constituted only about 20% of the total cost of steel making.

Posco's decision on iron ore exports comes at a time when opposition is building in Orissa over the controversial clause in the MoU. Even the National Advisory Council to the government, headed by Congress president Mrs Sonia Gandhi, has expressed its concern over the certain clauses in the MoU.

The state government is meeting more opposition now as the Jharkhand government has signed MoU with world's largest steel maker Mittal Steel without any commitment on iron ore exports even for blending purpose.

The MoU between Orissa government and Posco permits the steel company to export 30% of annual production from its captive mines under a swap arrangement.


No disinvestment of NALCO

Agencies New Delhi

October 21 2005

The government today categorically ruled out disinvestment of public sector aluminium major National Aluminium Company (NALCO), saying there was no such consideration as of now.

"I have already made it clear that there is no such move on the anvil and we are under no pressure from any quarter to disinvest in NALCO," Mines Minister Sis Ram Ola told reporters here.

He said the company was performing fairly well and there was no reason to even go for offloading ten per cent of its stake, as was being reported by the media.

NALCO Chaimran and Managing Director C R Pradhan too said there was no pressure to offload stake to garner money for its proposed restructuring.

"Once the second phase of modernisation programme was over, the company expected to increase its production to 4.6 lakh tonnes per annum," Pradhan told newspersons after presenting a dividend cheque for Rs 112.30 crore to the government.

On the future of aluminium prices, the CMD said as long as London Metal Exchange (LME) continues to be strong the domestic aluminium prices too would remain stable.

Nalco has achieved the highest ever turnover and profit during the last fiscal. The turnover for the fiscal was Rs 4,43 9.99 crore and the net profit before tax was increased from Rs 737.37 crore in 2003-04 to Rs 1,234.84 crore in the last fiscal.

Pradhan said NALCO has initiated the pre-feasibility study for setting up a smelter at Dubai in the UAE. "Once the study was over then only we will take any decision," the CMD said.

He said the company had inventories of only ten to 12 days.


CM peeved at clearance delay

Statesman News Service

Oct. 21 2005

BHUBANESWAR - Peeved over the delay in forest clearance for the mining projects of the state-owned Orissa Mining Corporation, chief minister Mr Naveen Patnaik today directed the forest officials to obtain the clearance within six months.

The direction from the chief minister came at a high level meeting, chaired by him to discuss the problem. It was revealed from the review that applications for the forest clearance for 14 mining projects of the OMC were pending with the state government and Environment & Forest Ministry at various levels.

The above mining projects could not be made operative for want of forest clearance, the meeting was informed.

While five projects (Sukrangi, south Kaliapani and Kaliapani chromite mines, Daitari iron ore mines and Kurmitar iron & manganese mines) were cleared by the Environment & Forest Ministry, two proposals for the Boula chromite and Nisikhal manganese mines were rejected. Another three projects ( Kathpal, Kalrangi , Sukrangi chromite mines and Gandhamaradan-B iron mines) were pending with the Environment & Forest Ministry.

Besides these, six projects ( SGBK iron & manganese mines, Tiringpahar iron, Dalki iron & manganese mines, Seremda-Bhadrasahi iron & manganese mines, Banspani and Khandbandha iron mines) were pending with the divisional forest officer, Keonjhar, another four projects (Koira-Kasira, Koira-Bhanjapali and Rantha iron mines and Kurmitar iron & manganese mines) were lying undisposed with the DFO, Bonai.

Application relating to the Birasal chromite mines was pending with DFO, Dhenkanal while the Orissa Mines Corporation has to apply for eight projects (Dubna manganese, Sakradihi iron, Roida manganese, Parulipda manganese, Sarubil-Sukrangi chromite, Mahagiri chromite, Baniapank chromite and BPJ iron ore mines).

A visibly displeased Chief Minister wondered why there was so much delay in obtaining forest clearance for the OMC projects while the private parties were getting timely forest clearance.

Steel & Mines Minister, Mr Padmanav Behera said steps would be taken to expedite forest clearance. Fresh applications would be submitted in the proper format, wherever necessary.


J'khand enforces blanket ban on export of minerals

M Madhusudan/HT Correspondent The Hindustan Times

October 20, 2005

Ranchi - The Jharkhand government on Thursday took the first concrete step towards enforcing a blanket ban on the export of minerals from the State to anywhere outside the country.

The move assumes significance since there were no laid down rules and regulations to this effect and the state government's declaration earlier banning the export was only in principle.

The state cabinet, which approved a proposal in this regard by the Mines & Geology Department, however, allowed the provision of inter-state export of minerals providing the mining lease holders, who had been granted the prospecting licences prior to the move, first fulfilled the needs of the local industrial units on a priority basis.

The ban, which precedes the state government's plans of putting a Mineral Policy in place, now includes in its ambit all those mining leaseholders, already functional in the state, whose export activities continued unchecked in the absence of a written law.

Official sources said the ban was put into effect to prevent any controversy, especially, in the wake of investors making a beeline to Jharkhand and the hullabaloo over the Orissa government's deal with Posco.

A case in point is the Mittal Steel, which had initially insisted upon the export of 30 per cent of the total 600 MT iron ore reserves to be earmarked for its steel plant. However, with the Jharkhand government refusing to accept its request, the world's largest steel maker withdrew its export clause before finally signing the MoU for setting up a 12 MT steel plant with an investment of Rs 40,000 crore.

The Cabinet further approved a proposal stipulating that, henceforth, the mining leases would be granted to only those entrepreneurs who set up their units in Jharkhand for carrying out the value-addition part of the minerals.


No temporary permits for forest mining

Indian Express

October 06, 2005

Alarmed by the rampant misuse of its direction on the grant of Temporary Working Permits (TWPs) for mining projects in forest areas, pending final clearance from the Centre, the Supreme Court hasordered discontinuance of the practice till further orders.

''We again reiterate that without compliance of the environmental laws, in particular the permission under the Forest (Conservation) Act, 1980, no Temporary Working Permit or any other permission by whatever name shall be granted for mining activities in national parks, sanctuaries and other forest area,'' said a bench, headed by Justice Y.K. Sabharwal.

The court was hearing pleas filed by senior counsel Harish Salve, alleging its orders were being misused and working permits granted to some parties were being extended. In December 1996, the SC had clamped down on mining in forest areas, making Central approval mandatory for carrying out non-forest activity, including mining.

The affidavit filed by Anurag Bajpai, Assistant I-G of Forests, showed that 21 TWPs were granted between 2003 and 2004 for mining in national parks, sanctuaries and forests. This included three in Andhra, four in Karnataka, 10 in Orissa and one each in Chhattisgarh, Himachal, Jharkhand and Rajasthan.


Iron ore lorry operators in Dakshina Kannada go on strike

Hindu Business Line

October 4 2005

RON ore lorry operators in Dakshina Kannada began an indefinite strike on Monday seeking higher rental from exporters for their vehicles.

Addressing lorry owners here on Monday evening, Mr G.R. Shanmukhappa, President of the Federation of Karnataka Lorry Owners and Agents Association, said that though there was increase in the prices of diesel and vehicle spare parts, rentals for iron ore lorries did not go up.

While the mine owners and exporters are getting good price for iron ore, the lorry operators transporting the commodity have been neglected. In spite of repeated requests by lorry owners, there is no increase in the lorry rentals.

The Government, which is collecting Rs 1,200 crore as road tax from lorry owners, has not given adequate importance for the maintenance of roads. Instead, lorry owners are being targeted for the poor conditions of roads. He urged the Government to improve the condition of roads in Dakshina Kannada.

Mr B. Shashikiran, President of D.K. Mines Lorry Owners Association, was present on the occasion.


Jindal in talks to buy foreign coal mines

Varun Sood, India Press

October 03, 2005

New Delhi - Jindal Stainless is in "advanced stages" of acquiring coal mines in Australia, the Middle East and Indonesia. Jindal, which plans to invest $50-75 million in these acquisitions, is also scouting for iron ore mines in South Africa.

A company executive said, "Negotiations are in progress to arrive at the right valuations." He said the acquisition would be done either by Jindal alone or through a joint venture.

Earlier this year, the company signed a memorandum of understanding with the Orissa government to set up a 1.6 million tonne integrated stainless steel plant and a 500 megawatt captive power plant at Kalinga Nagar in the Jajpur district for Rs 6,628 crore.

The first phase of the project is expected to see the construction of 0.6 million tonne plant in 30-32 months, while the entire project was scheduled for completion by 2011.

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