Govt rejects steel industries’ demand for JV with OMC

OST Business Bureau 

Bhubaneswar, Aug 5

The Odisha government has summarily rejected the demand of local steel industries to forge joint venture (JV) with state PSU Odisha Mining Corporation (OMC) for joint exploration of minerals to run their ailing steel plants in the state.

“The state government has refused the proposal of steel units to have JVs with OMC for exploration of minerals leased out to OMC and to be allocated to the state PSU. We are strengthening the mining PSU to make it capable of handling all these mines,” Steel and Mines minister Rajanikant Singh told reporters after a meeting with the members of All Odisha Steel Federation (AOSF) and mines officials here today.

The minister, however, assured the federation that the government was taking all steps to run the steel units smoothly. The three-member inter-ministerial committee of the state government had already submitted its report on long-term ore linkage, which would make provision for ore supply to the local industries, he said.

It may be mentioned that AOSF, a body comprising 200-odd steel and sponge iron units, had recently proposed formation of JVs with all existing units as OMC does not have the requisite infrastructure to handle and operate so many mines together. Justifying the contention, PL Kandoi, president AOSF, had said, “This will put more burden on OMC as it does not have the requisite infrastructure to handle and operate so many mines together which will result in poor and inadequate supply of iron ore to the existing units. As a long-term remedy, OMC must be directed to have joint venture/long-term purchase agreements with all existing units.”

Meanwhile, the federation has moved the Odisha High Court seeking continuance of 50 per cent ore reservation for the local industries in the state.

The Odisha government, in its resolution on December 5 last year, had said that mining companies have to sell at least half the iron ore they extract from the mines to the industries which are within the state.

However, rejecting the resolution of the state government, the Union Mines ministry had maintained that the decision cannot be invoked by application of Rule 27 (1) (m) of the Mineral Concession Rules, 1960, under the pretext of right of pre-emption.
There were objections from the miners, who alleged the supply of iron ore was grossly insufficient in proportion to its production.