___________

Following is an excerpt from a report in ibnlive.com.

Naveen demanded that five State Highways — Berhampur-Koraput, Madhapur-Rayagada, Phulnakhara-Konark, Kuakhia-Aradi-Bhadrak and Palasa-Khariar — be upgraded to NHs.

Following are excerpts from a report in Hindu.

The Orissa Chief Minister, Mr Naveen Patnaik, has sought 50 per cent share in “super normal profit” earned by private mine owners and said he would raise the issue of imposition of a mineral resource tax on iron ore during the National Development Council (NDC) meeting on Saturday.

“Mining companies are making super normal profits in Orissa. People of Orissa deserve 50 per cent of this…a quarter of our population is of tribals and we will put this profit to developing our areas,” Mr Patnaik said.

He said this was essential as most of the mining companies were operating on tribal land without doing justice to the people. Despite the State being the owner of the resources, the mine owners are benefiting beyond any measure of reasonable returns, he said.

“I have already written to the Prime Minister about it. I will be speaking about it in the NDC meeting. Rent-resource tax from the mining companies should be levied on Australia’s pattern,” he said.

In a July 30 letter to the Prime Minister, Mr Patnaik said, “The insatiable demand for iron ore in the export market has resulted in iron ore becoming highly profitable commodity, with returns from mining being far in excess of economically acceptable rates.”

The letter mentioned that the super-normal profits being made are evident from the audited operational profits of 80 per cent by miners, which is unheard of in other industries.

The Chief Minister had sought imposing a 50 per cent mineral resource tax, taking cue from Australia which has decided to levy higher taxes on iron ore from July 2012.

Following is from Sambada.

The various news reports that initially came after Mr. Jindal met the CM, such as the above, did not mention anything regarding Mr. Jindal wanting iron ore linkage for his steel plants. But reports on the next day mentioned that. Following is an excerpt from a report in Financial Express.

The Jindal Steel & Power Ltd (JSPL), which is all set to commission its 2 million tonne steel plant next month, is desperately looking for iron ore linkage.

JSPL vice-president and managing director Naveen Jindal urged Orissa chief minister Naveen Patnaik for allotment of a captive iron ore mine for the plant.

Jindal met the Orissa CM on Tuesday and discussed the steel project and the captive power plant.

Sources in the government told FE that the JSPL managing director has requested the chief minister Naveen Patnaik to ensure raw material security for the plant through suitable iron ore concession.

Following is excerpted from a report in Business Standard.

• Overall: employment for 39104 people in the state by the end of December 2010.
• Steel sector: 31164 jobs which includes employment for 22399 people from the state and 8765 people from outside the state.
• Aluminium sector: 5474 people including 3657 from the state and the remaining 1817 outside the state. Investment worth Rs 11017 crore has been grounded in this sector.
• In the aluminium sector, Vedanta Aluminium Ltd (VAL) has been the biggest job creator, generating over 5000 jobs through its one million tonne per annum (mtpa) refinery project and 75 MW captive power plant (CPP) at Lanjigarh in Kalahandi district and aluminium smelter complex at Burkhamunda near Jharsuguda with a smelter capacity of 0.25 mtpa and a 675 MW CPP. At its refinery plant, VAL has employed 2523 people from Orissa and 1091 persons from outside the state. Similarly, 1026 people have been engaged from the state for VAL’s smelter plant while 686 others have been hired outside the state. VAL’s total investment on the refinery plant and smelter complex stands at Rs 9084 crore.
• Aditya Aluminium Ltd has invested Rs 1875 crore on its one mtpa alumina refinery at Rayagada and a 0.26 mtpa smelter plant cum 650 MW CPP at Sambalpur. The company has created jobs for 63 people from the state and 34 others outside the state.
• Cement sector: The total employment generated stands at 1502 by the end of December last year.
• OCL Cement Ltd has generated employment for 1494 people and the company has invested Rs 697.46 crore out of a total project cost of Rs 850 crore for its 1.10 mtpa cement manufacturing unit at Rajgangpur. The other two investors in the cement sector- Ultratech Cement Ltd and ACC Cement Ltd have made negligible progress on their projects in the state.
• In the power sector, the Independent Power Plants (IPPs) have generated employment for 964 people.
• Sterlite Energy Ltd has commissioned the first unit (600 MW) of its 2400 MW IPP, four other IPPs- GMR Kamalanga Energy Ltd, Monnet Power Company Ltd, Jindal India Thermal Power Ltd and Ind-Barath Energy (Utkal) Ltd have started construction.

Following is from a report in Orissadiary.

The 6-million tonne Essar Steel pellet plant here will be made operational by October this year. The `2,200-crore project includes an 8-MT ore beneficiation plant at Joda and Barbil and a 250-km slurry pipeline from Joda to Paradip. The company plans to expand the beneficiation and pellet manufacturing capacities to 12 MT in the future.

Initially, the company will source iron ore from private mines at Joda and Barbil. However, the company expects that the State and Central Governments will grant it lease for a captive mine in the long run.

The pellets to be produced at Paradip would be exported through the Paradip Port to Essar’s steelmaking unit at Hazira in Gujarat, which is undergoing a capacity expansion to 9.6 MT from 4.6 MT by 2012, said sources.

Following is excerpts from an interview in Business Standard. The investment numbers mentioned there does not quite gel with the numbers mentioned above.

Is there a time frame for realising the long-term vision?

It arises from the commitments, as well as MoUs (memorandums of understanding) with various state govts. These are linked to raw material. It’s a chicken and egg story. You need the raw material, otherwise you are not going to invest. We have our plans in Jharkhand, Chhattisgarh. In Orissa, we are already completing the first phase. In Karnataka, we have signed the MoU and the government is looking to provide land. But we also want the mines. We don’t want to create a situation where all the investments are done and then you say the mines are not available.

The Orissa government has a clause in the MoU that the state will recommend mines once you have made commitments for 25-30 per cent.

Yes, commitments have to be made, which implies it could be orders. But a 12-million tonne plant will cost anything between $12 billion and $15 billion. Thirty per cent of that will be $4.5 bn. How can anyone expend $4.5 bn in the hope that one will get the mines? It’s easier for smaller players.

Following is from an article by Nageshwar Patnaik in Economic Times. Nageshwar is a big critic of the Tatas. So coming from him, I give a lot of value to the article.

Buoyed by successful resettlement of displaced persons after five years, Tata Steel, which is setting up a 6-mtpa steel plant at Kalinga Nagar in Orissa’s Jajpur district, has undertaken massive infrastructure development work at the project site to get support of the local people, especially the tribals.

Under its Tata Steel Parivar resettlement and rehabilitation (R&R) programme, the leading steel producer of the country has laid 20 km of quality motorable roads connecting all rehabilitation colonies, besides constructing 32 km of drainage system at adjoining tribal-dominated villages such as Trijanga, Sansailo and Gobarghati.

As many as 300 sodium vapour halogen lamp posts have been installed and pipe water provision made to provide better life to the displaced people living in rehabilitation colonies.

Each colony in the project area has a dispensary, community centre and several education centres offering management and technical courses.

“The Tata Steel Parivar rehabilitation scheme at Kalinga Nagar provides substantially better facilities than the government-framed R&R policy. The government policy provides employment for one member from each core household. On the other hand, Tata Steel Parivar policy provides employment opportunities for each major member of the core house. It also provides training facilities for technical skill upgrade,” a press statement, issued by the company here on Thursday, said.

The release also noted that scholarships were being provided for displaced persons pursuing higher education in professional fields such as medicine, engineering and management.

“An amount of Rs 2.21 lakh is also provided as onetime assistance in lieu of employment. Further, under the Tata Steel Parivar policy, each family is given a monthly maintenance allowance of Rs 2,000-2,300 till they get employment in the plant whereas the policy stipulates payment of maintenance allowance for 12 months only,” it added.

The opposition in Kalinganagar has finally seen light and allowed the Tatas to build the infrastructure of Kalinganagar. Related to this, The Telegraph of UK has apologized to the Tatas for their negative coverage.

Things also seem to be going in the positive direction in the POSCO front and I hope the people there visit Tata’s colonies in Kalinganagar and demand and get similar or better facilities and form a positive partnership with POSCO. In addition the Odisha government should push POSCO in developing a POSTECH like University in Paradeep.

However, there is not much progress with respect to Vedanta Aluminum in Kalahandi or Vedanta University in Puri. Here again it would be wise for the people there to visit Tata’s colonies Kalinganagar and demand and get similar or better facilities and form a positive partnership with Vedanta. But the time may be running out for Puri as Vedanta University Project has indicated that it may give up and move south where it will be welcomed with open arms. If that happens it would of course be a mistake of a century for Puri and Odisha.

In regards to the Arcelor-Mittal and Keonjhar the company really has not made much visible effort to woo the people.

Following are excerpts from a report in tathya.in.

Odisha’s Power sector gets a relief as the first Unit of 2400 Independent Power Plant (IPP) at Jharsuguda would be commissioned in coming Summer’, he said to the media after meeting the Chief Minister.

This will add 600 MW to the state’s power production capacity and can help the State Government in facing the current power crisis. 

Mr. Agarwal revealed that construction work of world class Vedanta University near Puri has already started. 

At the first stage, the University will have a 1000 bed super specialty hospital and Medical College, also academic building. 

Vedanta Boss also informed the meeting that Lanjigarh refinery is fully operational by sourcing bauxite from other states, incurring a huge opportunity loss for both states as well as company. 

State Government has assured to look into the issue seriously and try to work out for an immediate solution. 

Construction activities for a specialized burn and trauma care centre at Bhubaneswar would begin very soon.

Following is an excerpt from a report in Business Standard.

After committing an investment of Rs 60,000 crore on various projects in Orissa including an aluminium smelter plant, an alumina refinery unit and a mega university project, London-based Vedanta Resources Plc has now evinced interest in setting up a steel plant in the state.

Vedanta plans to set up the steel plant in collaboration with engineering and construction major Larsen and Toubro (L&T).

… However, he did not provide details like capacity of the proposed steel plant, location and investment. It may be noted that in October 2004, Sterlite Iron and Steel Company, a subsidiary of Vedanta Resources, had inked an MoU (Memorandum of Understanding) with the state government for setting up a five million tonne per annum steel plant. The steel plant was to set up at Palasponga in the state’s Keonjhar district at an investment of Rs 12,502 crore. However, the project is yet to take off.

On bauxite supplies, Agarwal said, he has informed the state chief minister that Vedanta’s alumina refinery plant at Lanjigarh in Kalahandi district is operational and the company is sourcing bauxite from other states to run this refinery.

The chief minister has assured that us that bauxite supplies would not be a problem in Orissa which has the fourth largest deposits of the mineral ore in the country, Agarwal informed.

He further said the company is adhering to the environmental norms in running the Lanjigarh refinery, adding, “Our refinery at Lanjigarh is a world class refinery and it is a zero discharge and zero waste unit. …"

He pointed out that the company would commence mining operations at Niyamgiri hills in Kalahandi district after getting the environmental clearance.

Agarwal said, Vedanta has already invested Rs 39,000 crore on various projects in Orissa and these projects have generated direct and indirect employment for about two lakh people.

Vedanta Aluminium has also decided to set aside five per cent of its net profit or Rs 10 crore every year on welfare activities of the tribals of Lanjigarh. The amount will be spent on meeting the needs of the tribals in areas like education, livelihood and health.

The company will also build the hostel for the proposed engineering college of the state government at Bhawanipatna.

On the 2400 MW (6×400) power plant at Jharsuguda, Agarwal said, the first unit of the independent power project (600 MW) will be operational from the ensuing summer.

Talking on the company’s proposed university project, he said, “We have huge local support for our university project and at first we will set up a 1000 bed state-of-the-art hospital as a part of the project.” Apart from the 1000 bed hospital, Vedanta has also firmed up plans to set up a 100-bed burn and trauma care centre at Gangapada on the outskirts of the city. Construction work on this centre wold take off very soon, Agarwal stated.

Following is an excerpt from an IANS report by Hardeep Sidhu in topnews.in.

The Orissa vigilance department Thursday filed criminal cases against the state’s two leading companies for their alleged involvement in illegal mining, a senior official said.

"The cases have been filed against Indrani Patnaik Mines and Triveni Earth Movers at vigilance police station at Balasore," Vigilance Department Director Anup Kumar Patnaik told IANS.

He said that 10 cases of illegal mining have been filed till now. Balasore is some 200 km from here.

Both companies have been accused of illegally mining iron ore in the mineral rich district of Keonjhar. …

Essel Mining is an Aditya Birla group company. Such allegation, if true, by a Birla group company is really unfortunate. No wonder many people in Orissa mistrust industrialists. If the above allegations are true, the Orissa government should cancel the mining lease of Essel Mining and sue it to get the money Orissa lost.

Following is an excerpt from a PTI report.

About 80,000 tonnes of iron-ore worth more than Rs seven crore has been seized by Orissa’s mining authorities from Koida mines in Sundargarh district, officials said today.

Mining officers, during their raids yesterday seized about 70,000 tonnes of lumps and 10,000 tonnes of fine iron-ore.

Irregularities were also found in mining operation by a contractor, they said, adding ESSEL company has allegedly left its leased mining areas untouched and has been illegally raising the iron-ore beyond its surface rights.

Essel Mining is an Aditya Birla group company. Such action, if true, by a Birla group company contractor is really unfortunate. No wonder many people in Orissa mistrust industrialists. If the above allegations are true, the Orissa government should cancel the mining lease of Essel Mining.

Following is an excerpt from a report in Business Standard.

… Projects awaiting the chief minister’s nod include those proposed by National Thermal Power Corporation (Rs18,000 crore), L&T-Dubal (Rs 19,668 crore) and Lanco Babanh Power (Rs 11,402 crore) among others.

… The SLSWCA in its meeting held in March 2007 cleared the Rs 4232.54 crore investment proposal of Ashapura Minechem Ltd for setting up of a 0.5 million tonne per annum (mtpa) alumina refinery and 0.15 mtpa smelter with 300 Mw captive power plant (CPP) in Koraput district.

Similarly, NTPC proposal to set up a 3200 Mw thermal power project at Darlipali in Sundergarh district was approved by the SLSWCA in February 2008.

The fate of L&T’s proposal to set up an alumina-aluminium complex at Kusumsila near Rayagada and Vadrapali near Sambalpur in joint venture with Dubal is still uncertain.

Sources said, the HLCA is yet to consider the Rs 8,250 crore investment proposal of Orissa Thermal Power Corporation Ltd (OTPCL) to set up a 2000 Mw coal based power plant at Rengali. It is also yet to take up the Lanco Babandh Power’s application to enhance the MoU capacity from 1320Mw to 2640 Mw at Kurunti and Kharagprasad in Dhenkanal district.

The Rs 3101.86 crore proposal of Tata Sponge Iron to set up a 1.5 mtpa steel making capacity at Beliapada near Joda, recommended by the SLSWCA in May this year, is also pending for approval by the chief ministers.

… Though VAL had proposed to expand the capacity of its existing refinery at Lanjigarh from 1 mtpa to 6 mtpa, smelter plant capacity from 0.25 mtpa to 1.6 mtpa and the captive power plant (CPP) capacity from 674 Mw to 1350 Mw with a combined investment of Rs 37,440 crore, it was cleared in part by the SLSWCA.

The SLSWCA meeting held in May this year had recommended for a smelter capacity of 0.5 mtpa as the company had already achieved this level while approving the capacity expansion of the CPP to 1350 Mw without any increase in the refinery capacity.

Similarly, Hindalco Industries Ltd (Aditya Aluminium) had proposed to expand its alumina refinery capacity to 1.5 mtpa from 1 mtpa and expansion of its smelting capacity to 0.72 mtpa from 0.26 mtpa along with an increase in the CPP capacity to 1650 Mw from 650 Mw.

SLSWCA has only recommended a marginal increase in the smelting capacity from 0.26 mtpa to 0.36 mtpa and CPP capacity from 650 Mw to 950 Mw to the HLCA. Partial approval of these proposals was officially attributed to the non-availability of bauxite linkage and pending the final report of the environmental carrying capacity study taken up by the Orissa State Pollution Control Board.

That apart, the SLSWCA in its meeting on 26 August 2009 also recommended two projects of Rs 14,275 crore to HLCA. The Rs 7988 crore proposal of JR Powergen Private Ltd to set up a 1980 Mw power plant at Kishorenagar near Angul and BRG Energy Systems’s proposal to set up a 1320 Mw power plant at an investment of Rs 6287 crore at Bhapur in Nayagarh district are yet to be approved by HLCA.

(Thanks to Umashankar babu for the tip.)

Following is an excerpt from a report in the Wall Street Journal.

India’s federal government has approved an increase in mining royalties for various minerals including iron ore, copper, zinc and lead, government officials said Wednesday.

Two mining ministry officials, who didn’t want to be named, told Dow Jones Newswires that India’s cabinet committee on economic affairs has approved the proposal for changes in royalties on minerals other than coal, and a formal notification with immediate effect is expected this week.

…  The change in rates will increase states’ annual revenue from royalties to 46.3 billion rupees ($968.6 million) from 22.88 billion rupees.

… The officials said the government will levy a 10% value-added or ad valorem royalty on iron ore mining.

For iron ore miners, the new royalty will mean switching to a tax regime under which they will be charged based on the market value of the minerals compared with the existing system of flat rates based on weight, the officials said.

At present, the government charges a fixed royalty of up to 27 rupees a metric ton on different grades of iron ore.

Iron ore spot prices in the local market may rise by about 10% in the near future, … said Rahul Baldota, …  But he added that iron ore producers in India, the world’s third-largest supplier of the commodity, will absorb the cost for exports in order to remain competitive.

…  India already charges value-added royalty rates for zinc, copper and lead, but the rates charged will now increase.

The government will charge an 8% royalty on zinc ore, up from 6.6% earlier, while the rate on copper will rise to 4.2% from 3.2%. The royalty on lead ore will go up to 7% from 5%.

On bauxite used for other than alumina and aluminum extraction and exports, a royalty of 25% will be charged. For use in alumina and aluminum extraction, the rate will be 0.5%. Previously, no royalties were charged.

Following is from a report in Steelguru.com.

… to augment the availability of iron ore, particularly in the context of number steel plants being proposed to come up in the state, the Orissa government plans to intensify exploration of iron ore at different locations of mineral rich Sundergarh and Keonjhar districts to identify new reserves.

The exploration work be taken up during the current year include the northern part of the Baliapahar iron ore deposits and Mandajorha area in Sundergarh district and outer Malangatoli area of Keonjhar district.

The directorate of geology of the Orissa government has decided to take up assessment of the iron ore lying in the northern part of Baliapahar iron ore deposit in the Sundergarh district. It will delineate the unexplored iron ore bodies in this area through survey and large scale mapping and then take up assessment of reserves through drilling.

Though this area was investigated earlier in 2 phases in 1971-74 and 1991-95 through mapping and core drilling, the drilling of the northern part was not complete. It has also been decided to go for preliminary appraisal of the iron ore occurrences to the west of Malangtoli and north-eastern part of the Mandajorha area.

As per report, this area was identified as the unexplored block during the last field season through inventory work. It is proposed to take up investigation of the area around Malungi and Mandajoraha during the current field season.

Sources added that there are plans to continue and complete the investigation program in the unexplored blocks in the Koira sector of the Sundergarh district for iron ore reserves. Geological mapping around Lasi, Jilkura, Marchidihi is proposed to be taken up during the current field season. Similarly, the government also plans to start the investigation of the iron ore around Rakma-Marsuan in outer Malangtoli area in Keonjhar district.

Sources further added that geological mapping and sampling will be taken up to locate iron ore bodies in this area which was prospected by the Geological Survey of India in the 1960s. Since the area is located in the vicinity of Bonai shoe iron ore synclinorium and very close to Malangtoli iron ore complex, the government feels that geological investigation will be beneficial from the point of view of exploration.

The following excerpts from a news item from tathya.in illustrates the difference between the state’s income due to only royalties and through auction.

In 2002 the IDCOL made an abortive attempt to give away the mines to Jindal Stainless at a throw away considerations ignoring higher bids by Tata Steel and Visa Industries.

The ill-conceived move by the bureaucrats was foiled by the Orissa High Court, which passed adverse comments regarding the Government of Orissa attempt to compromise public interest in the deal.

Both the State Government and IDCOL appealed before the apex court to get relief with considerable cost and time.

Supreme Court’s order for re-bidding how ever has now materialized.

To the amazement of every one Jindal Stainless which had offered a sum of Rs.38 per ton has now come up with a bid of Rs.3000 per ton for ore having 48 per cent chromium.

And on average they have offered per ton Rs.900.

Visa Industries has out bid Jindal Stainless with an offer of Rs.7000 per ton of chrome having 48 per cent of chromium content.

Even assuming the changes in the commodity prices which have taken place in last 5 years is too much than the price offered earlier.

The colossal loss to the flagship Public Sector Undertaking (PSU), IDCOL can be well imagined if the Jindal Stainless had succeeded in 2002.

Now with opening the financial bids of the participants, it underscores the point that the State Government’s Policy for leasing out the mineral resources of the state is faulty and not at all in the best interest of the state, said a financial analyst.

To take the advantage of high price in demand of metals and minerals in the international market, corporate giants and multinationals like POSCO, Arcelor- Mittal, Essar, Vedanta, Jindal, Bhusan and many others are flocking to Orissa to corner mining leases.

The State Government  … Yet they do not learn from the Tangarpada experience.

… Under the MMDR Act, mines can be reserved for the PSUs and leased out to the State owned companies like IDCOL and OMC.

These PSU can auction the mines among the credible parties after floating world tender for value addition and derive bonanza.

Till date no body knows about the “Policy of Value Addition” of the Government of Orissa.

The Policy should come up immediately and it should be implemented in letter and spirit for the interest of the state.

The positive changes of Policy will not effect industrialization, but it will give substantially higher rate of revenue to the state exchequer as demonstrated in case of Tangarpada.

The state’s entire requirement of funds for eradicating poverty and developing the state can be generated with the policy change, said a former Union Minister.

However there is no effort in this direction.

…  Instead of Centre bashing the State Government should make efforts to maximize revenue from mineral resources through PSU mode, observed a former Secretary of the Government of India.

Definitely the state can earn much more on just the minerals by leasing it to state companies like OMC and IDCOL and then letting those companies auction the mineral. The possible negative of completely following that approach, especially with respect to iron ore, is that the winner of the auction can then take the ore and set up plants in other states. If that happens Orissa will lose out on the side developments associated with plants such as infrastructure building, jobs and the tax that the state can get from the companies.

What the state should do is to try for the best of both worlds. I.e., offer other facilities and enticements to keep the companies in the state but go the route of auction. What other facilities and enticements can the state offer?  Orissa being on the coast, availability of ports nearby is an important factor and it is good that the state is working on the development of many ports and railway lines to those ports. Easy availability of land for the companies will help. More thoughts need to be put in this direction.

There is a chance that some companies will not set up shop in Orissa under these conditions; but these days there seems to be a lot of companies who want to set shop. So perhaps the time has come for the state to change its approach of leasing mines to attract companies to auctioning minerals via IDCOL and OMC and using other methods to attract value addition companies.

Following is an excerpt from a report in Pragativadi.

Jindal Steel and Power Ltd is optimistic about commissioning the first phase of the proposed six MTPA steel mill in Orissa’s Angul district by October 2010.

… Briefing newsmen after the meeting, Jindal said that the work for the first phase of the project was progressing well.

The company had already spent Rs 4,000 crore so far for it and has placed an order for equipment for the purpose.

Of its total project cost of Rs 13,135 crore, JSPL had also spent a lot on land, construction, equipment and other activities, he said.

Jindal said JSPL has a small iron ore mine at Tensa in Keonjhar district and is hopeful of getting raw material linkage to its Angul project. 

We have been allotted coal block for the requirement of our captive power plant and the steel plant, he added.

He said that the company apprised the chief minister about the progress and made a presentation before him, while seeking the state government’s help in availing new raw material linkage early.

The JSPL which signed an MoU with the state government for setting up a beneficiation plant at Deojhar in Keonjhar district and the Angul steel plant on November 11, 2005, had progressed well besides tackling local problems, he said.

Following is an excerpt from a report in Pragativadi.

The Supreme Court on Friday permitted South Korean steel major Posco to set up Rs 51,000-crore mega steel plant and captive minor port at Paradip in Jagatsinghpur district.

A special environmental bench headed by Chief Justice K G Balakrishnan allowed Posco India Pvt Ltd, a subsidiary of South Korea-based Posco, to go ahead with its plans.

With this order, the apex court has also cleared forest diversion proposal for the plant site which require 1253.225 hectares of forest land.

The court, while directing the Orissa government to dispose of all the Posco’s applications seeking prospecting licences within four weeks, also asked the state government to send its recommendations to the ministry of environment and forests that would proceed in accordance with law.

The bench also asked the state government to undertake implementation of compensatory afforestation plan under the supervision of a Supreme Court-appointed committee comprising top officials of the state government.

… Posco counsel Mukul Rohtagi contended that the state government-owned Orissa Mining Corporation had agreed to supply uninterrupted iron ore and other minerals for its steel project and had identified mines in the western part of the state, some 300 km away from its project site.

… The company can source raw materials on its own and can buy the same from the open market, he said, adding that the company is not dependent on prospecting licence.

Following is excerpted from a report in Pragativadi.

According to a preliminary estimation made by the Directorate of Geology, nearly 8 million tonnes (MT) of bauxite was reserved at Ushabali plateau in Kandhmal district. Estimation regarding bauxite reserve in Kandhamal district is preliminary. The volume of reserve could be more, an official said, adding survey work would be extended to nearby areas this year.

The Orissa Mining Corporation (OMC) recently reviewed the mineral survey activities taken up the Directorate of Geology to find new reserve, particularly iron ore, which was in demand as the state had signed MoU for setting up of at least 46 steel plants.

The Directorate had completed survey of Hirapur area in Nabarangpur district for iron ore deposits and had also undertaken fresh surveys in Joda, Badbil in Keonjhar and Daitari in Jajpur.

Though the directorate had completed iron ore survey work by using drilling method at Tensa area of Sundargarh district, the findings were under study, sources said.

Similarly, the survey had also concluded that small diamond reserve could be traced at Dharamabandha and Nangalbod area of Nuapada district where the precious metal was found along with stones.

Following is an excerpt from a report in Business Standard on this.

Arcelor-Mittal’s proposed Rs 40,000 crore, 12 million tonne per annum greenfield steel project in Orissa has made headway with the start of the land survey at the proposed site in Patna tehsil in the Keonjher district.

While the company has launched the survey in 16 villages in the area, it has completed the process in four villages. The company has also submitted a land acquisition plan to the state government.

Meanwhile, though the company has finalised a rehabilitation and resettlement (R&R) plan for the project-affected people, it is waiting for the land clearance from the state authorities to submit it to the government.

“We have our R & R proposal ready. Once the state government gives clearance of land, we will submit the proposal”, said Malay Mukherjee, member, group management board, Arcelor-Mittal.

Talking to mediapersons after a meeting on the progress of the project chaired by Chief Secretary Ajit Kumar Tripathy, Mukherjee said about 70% of the detailed project report (DPR) work for the Keonjhar plant is complete. The report is expected to be finalised by June 2008, he added.

M N Dastur & Company is preparing the DPR. The scope of the DPR, among other things, includes captive mining facilities, captive power supply, water supply and other infrastructure facilities like effluent disposal, environment and township for the company�s employees. …

While the company has got a coal block along with five other companies in Rampia and dipside Rampia, it is exploring the possibility of forging partnership with a mining company to source iron ore till it is allotted captive mines. It has recently applied for a joint partnership with the state- owned Orissa Mining Corporation (OMC) in this regard. …

While the total reserves in Rampia and dipside Rampia is estimated at about 600 million tonne, Arcelor-Mittal is expected to get about 85 million tonne.

Mukherjee said a 10-member team of Arcelor-Mittal is now finalising the technical specifications of the steel plant.

Following is an excerpt from a report in Business Standard.

Mittal Steel India, which is in the process of readying its rehabilitation and resettlement (R&R) package for its 12 million tonne Orissa project, will consider issue of shares and land-for-land as part of its compensation to land-losers.

Sanak Mishra, chief executive officer, Mittal Steel India said, “The Orissa government’s R&R policy includes issue of shares as a means of compensation and if the people want it, we will do it. But that will happen at the implementation stage and we have to see the legal standpoint and the mechanism.”

Mittal Steel hopes to finalise the draft R&R package and make presentations to the Orissa government by month end. “If the Orissa government wants to incorporate something, we will look into it.”

The state government’s policy mentions convertible preference share as a compensation option. It says that at the option of the displaced family and subject to the provisions of relevant laws in force, the project authority could issue convertible preference shares or secured bonds up to a maximum of 50 per cent out of one-time cash assistance.

“There were also other physical issues being considered like alternative land for the displaced people. We will, however, have to assess how much land is required,” said Mishra.

… After finalising the scheme in consultation with the state government, Mittal Steel plans to embark on a communication programme with the land-losers.

The project site is a mix of government and private land. The 12 million steel plant at
Keonjhar would require around 8,000 acres, which includes 1,000 acres for the captive power plant and 1,000 acres for the township.

Mittal Steel is also in dialogue with the Orissa for iron ore mines. Various options are being explored, including arrangement with the Orissa Mining Corporation (OMC), a state-owned mining corporation.

“Talks are at an exploratory stage and it was too premature to talk about it. An arrangement with OMC could enable Mittal Steel to go through captive iron ore mine allocation process, which was one of the stumbling blocks for the company’s Jharkhand project,” Mishra added. Mittal Steel requires around 600 million tonnes of iron ore over a 30-year period for its steel plant.

Following is an excerpt from a report in Times of India about this.

… “We have received a proposal from Arcelor-Mittal, requesting for an arrangement with OMC,” confirmed a senior officer. “The government is exploring the possibilities and details remain to be worked out. It could mean a long term agreement or a joint venture between the two parties,” the officer told TOI. The government, sources said, has set up a four-member committee headed by chief secretary to examine the proposal’s feasibility and chalk out the draft terms and conditions.

Sources said Arcelor-Mittal is yet to submit any application for prospecting lease or mining lease for any iron ore deposits, but evidently does not want to take chances. Hence, it has proposed a tie-up with the state-owned body to serve as a back-up. “The company would no doubt go for captive mines. The pact with OMC would ensure an alternative raw material arrangement for the company’s project,” sources pointed out. Orissa has so far inked pacts for 46 steel facilities, sparking doubts over iron ore scarcity in future.

Arcelor-Mittal, which has signed an MoU with the state government to set up a 12 MTPA steel plant at an investment of Rs 40,000 crore, is the first major player to make this kind of a proposal. Some small steel units had earlier sought to enter into raw material supply agreements with OMC, apparently to ensure a steady flow of iron ore and offset price fluctuations. Some steel plants, which have reached production stage, are buying ore from the market at higher prices, sources disclosed.