The State Government has decided to scrap the joint venture (JV) agreements with global major Rio Tinto, Vedanta Group firm Sesa Sterlite and Aditya Birla Group-owned Hindalco Industries, official sources here said. The State-run Odisha Mining Corporation (OMC) had signed the joint ventures with Rio Tinto, Sesa Sterlite and Hindalco.
While the Government has decided to scrap the JV with Anglo-Australian mining major Rio Tinto, the OMC has issued show-cause notices to Sesa Sterlite and Hindalco asking them to furnish reasons for not cancelling the JVs, said the sources.
The Government has already communicated the termination of the JV to Rio Tinto.The decision is likely to come as a blow to the companies as they have set up their projects on the assurance of raw material to run their end-use plants.
The OMC had inked the JV with the Anglo-Australian company in 1995 to develop the Gandhamardhan and Malangtoli iron ore deposits in Keonjhar and Sundergarh districts with a mining capacity of 25 MT per annum. But the project could not take off.
In the two JVs with Sesa Sterlite and Hindalco, the OMC had formed two companies. South West Bauxite Mining Company (Pvt) ltd was formed for supply of bauxite from deposits in Kalahandi and Rayagada districts to feed the aluminium refinery of the Vedanta Aluminium ltd.
East Coast Bauxite Mining Company (Pvt) ltd was formed for development of the Kodingamali bauxite mines in Koraput district to supply raw material to the Hindalco alumina refinery.