The execution of the Malangtoli iron ore mine, which was allocated to the Orissa Sponge Iron and Steel ltd (OSIl) in 2002, has now become a subject of debate as the allotted firm has turned bankrupt and a bigger company is trying to grab the mine indirectly by taking over the OSIl.
What has fueled the speculation is that the recommendation of the Screening Committee comprising Mines Director and others regarding execution of the mine has not been acceptable to the Departmental Committee consisting of Secretaries.
While the Screening Committee had on December 20, 2016 recommended that the mine can be executed in favour of the OSIl, the higher Departmental Committee a few days later on December 26 urged the Chief Secretary not to accept the recommendation as the company has not yet met lease conditions.
Notably, OSIl was allocated the mine in 2002 with a condition to use the iron ore for captive plants at Palaspanga and proposed plant at Bamra. However, OSIl has neither done any expansion at Palaspanga nor set up a green field plant at Bamra. Hence the conditions of awarding lease have not been met.
However, the law Department had in November opined that the lease can’t be executed in favour of the OSIl and the OSIl can’t supply ore to the Bhushan Steel, which is reportedly trying to buy majority stake of the OSIl and intending to take the mine indirectly.
While the Bhushan Steel was reportedly negotiating with Monnet Ispat to buyout Monnet’s 35.1 per cent stake in OSIl, the latter’s withdrawal of application (on Jan 5) against conversion of warrant by Bhushan in SAT, has only added more fuels to the speculation.
Sources said the OSIl, which was promoted by Torsteel Research Foundation, on January 2 deposited `28 crore against payment of NPV on 2nd Jan’2017, reportedly sponsored by the Bhushan.
“If the Bhushan Steel manages to get the mines without auction, then it will be gross violation of e-auctioning of mineral resources of the State,” feel experts.
According to them, the State Government should take steps to put the mine in e-auction process for benefit of the State and its people.