Though the recently promulgated Mines and Minerals (Development & Regulation) Amendment Ordinance 2015, which entails auction of mining leases through competitive bidding, had literally shut the doors on South Korean steel giant POSCO's hopes of seeking rights to mine the Khandadhar iron ore reserves, certain provisions in the proposed legislation may still keep the door ajar for the company.
Section 10 (2) (c) of the Ordinance makes it clear that if a letter of intent has been issued to an entity by a state government for seeking a mining lease before the commencement of the mining ordinance, then the said lease will be given provided that the conditions of the previous approval letter's conditions are fulfilled by the party within two years of the ordinance's commencement date.
Though a MoU had been signed between POSCO and Odisha Government in 2005 to set up a steel plant in the state, and which was then touted as the country's biggest FDI project - with the project yet to take off, whether the MoU is still valid, is not clear. In such a scenario, it could get a leeway under the aforementioned provision of the ordinance which refers to the letter of intent clause.
Highly placed sources told The Pioneer that in case the state government has given the approval to a certain entity through an order or a letter of intent (whatever be the nomenclature) for seeking a mining lease, then there should not be a problem.
Mines Minister Narendra Tomar on Thursday said that even he will have to bid to get a mining lease. He was responding to a query regarding the fate of POSCO's long pending request of seeking to mine the Khandadhar iron ore reserve for fulfilling the raw material requirements of its proposed 8 million tonnes steel plant in Odisha.
Sources further indicated that though the Centre is keen to maintain transparency in the entire process of allotting mining leases by allowing their auction, at the same time it is also eager not to send out a negative signal to international investors, as the POSCO steel plant in Odisha is considered one of the biggest FDI project of the country.
India has on several occasions assured South Korea that the POSCO project will be honoured. The Odisha Government has also said that many companies had signed MoUs with them on the assurance that they will get mining leases, and these assurances need to be honoured.
During a meeting held last month between Prime Minister Narendra Modi and a delegation consisting of POSCO's top Indian management as well as South Korea's ambassador to India, sources in the know said that the company was given an assurance that all the "roadblocks" will be cleared in the matter.
Also sources further indicated that once the ordinance becomes a bill and the rules are being framed, then there is a possibility that some relaxation in rules could be introduced, which may allow POSCO to seek the mining lease.
Meanwhile speaking on the sidelines of the meeting of Central Geological Programming Board (CGPB) at Vigyan Bhawan during the day, Tomar announced that his ministry has decided to notify 31 additional minerals, presently under the list of major minerals, as minor minerals. The notification regarding this will be issued soon, he said.