Squabbling state, PSU leave 208 mt of Orissa ore untapped

Nov 23 2013, 18:33 IST
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SummaryIf mining scams and the consequent court decisions have hit the iron ore production in Karnataka and Goa hard

If mining scams and the consequent court decisions have hit the iron ore production in Karnataka and Goa hard, in another state, a central PSU with estimated reserves of 208 million tonnes (mt) of this key input for steel-making and unfettered by any such row is smugly sitting on them. The top management of Orissa Minerals Development Company (OMDC) and the state government are blaming each other for the delay in renewing the PSU’s mining leases that had begun to expire roughly a decade ago.

Amid the bickering, OMDC’s ore production is now almost negligible while in its heydays a decade ago it was the country’s third-largest ore producer with an output of roughly 3.2 mt. Only public-sector NMDC and private miner Sesa Goa used to produce more than OMDC, which is a step-down subsidiary of RINL, India’s second-largest steel PSU. Apart from the inability of OMDC top brass and the state government to resolve their differences, OMDC, by its own admission, is also constrained by lack of professional expertise in diverse areas.

The impasse is despite the fact that renewal of the leases would give OMDC access to mineral-rich areas aggregating 4365.262 hectares, located at Barbil in Keonjhar district of Orissa. If the PSU, which got listed on the BSE in August 2010, resumes its mining activity and regains its past glory, the country’s iron ore production and exports would receive a boost. India’s iron ore production plummeted from 219 mt in 2009-10 to 140 mt in FY13 owing to a ban following the illegal-mining scam. Export earnings from ore have come down to a trickle from $6 billion in 2009-10.

OMDC’s mining activities have come to a standstill despite its huge cash reserves of R678 crore as of end-March. The lease areas mentioned above are also estimated to hold manganese ore reserves of 44 million tonnes.

Speaking to FE, a senior official at the Orissa mining department said the OMDC management isn’t showing any interest in getting some statutory clearances necessary for renewal of leases. AP Choudhary, RINL’s CMD who is also chairman of OMDC, denied any lapse on the part of the company, adding that the company was expecting the final nod from the state for quite some time now. It will take only a month for OMDC to resume mining once the approval is given, Choudhary added. He said that since the PSU has recently got high

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