“The letter by Union Steel Minister to CM Shri.Naveen Patnaik in March 2015 made it clear that Posco had to come through the bidding route to win a mining lease”
The Odisha government has landed itself in embarrassment for its failure to respond to a missive from the Union mines ministry seeking clarification on Posco India’s eligibility for prospecting licence (PL) over Khandadhar iron ore deposits.
The Union mines ministry in its letter in April 2015 had urged the state government to ascertain if grant of PL to Posco India is saved from ineligibility under Section 10A of the amended Mines and Minerals (Development & Regulation) MMDR Act.
State steel & mines minister Shri,Prafulla Mallick said, there was no case for replying to the letter as the Centre had already declared Posco as ineligible to get the PL.
“The Union mines minister had already clarified that Posco was not eligible for PL under the new MMDR Act. So, we did not consider it appropriate to reply to the letter issued later,” he said.
The letter by Union steel & mines minister Narendra Singh Tomar to Chief Minister Shri.Naveen Patnaik in March 2015 made it amply clear that Posco had to come through the bidding route to win a mining lease.
“You will agree that the facilitation for setting up of proposed steel plant by Posco in Odisha may only be done in the present ambit of prevailing Act and Rules. The state government may prepare for initiating the auction process under the provisions of the MMDR Amendment Act, 2015 in which Posco may also participate”, said the letter from Tomar. The state government had recommended grant of PL to Posco India over 2,082.50 hectares (ha) over Khandadhar lease in Sundargarh district.
In the latest reply to the state government’s proposal, AK Mallik, under secretary, Union mines ministry said, the proposal for grant of mineral concession was ineligible as per the provisions of Section 10 A (1) of MMDR Act.
However, the ministry urged the state government to examine if the proposal for Posco India was still eligible under Section 10A (2) of MMDR Act. If found eligible, the state government was supposed to bring it to the notice of the government of India so that necessary action could be taken as per the provisions of the amended MMDR Act.
In case of ineligibility, the proposal would be deemed as closed and the state government was to issue necessary order in that regard
According to Section 10A (2), those applications where a reconnaissance permit or prospecting licence (PL) has been granted in respect of any land for any mineral, the licencee would have the right to obtain PL followed by a mining lease (ML) subject to fulfilment of certain conditions.
A proposal for grant of mineral concession also becomes eligible under this Section if the central government has communicated previous approval as required under sub-section (1) of Section 5 for grant of ML or if a letter of intent has been issued by the state government for grant of ML before the commencement of the new MMDR Act.
Posco had recently announced that it had kept on hold its plan to set up a 12 million tonne mega steel mill in Odisha near Paradeep due to no progress on the project.
The company which initially faced people’s protest over land acquisition, received a jolt with enactment of new MMDR Act that dashed its hope getting captive iron ore mine on preferential basis, making it mandatory for all to come through the auction route for mineral resources ownership.
The steel company had entered into a memorandum of understanding (MoU) with the state government in June 2005 for setting up the steel plant at an investment of $12 billion, billed as the country’s single largest FDI.
Prasanta Patnaik 
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