Mr JB Patnaik's Congress government gave its permission to the company to trade in chrome ore on July 11, 1997, a few months after it renewed the company's mining lease with the condition that the ore raised would be used for captive consumption only. The same condition was imposed on the lease of mines granted to IMFA/ICCL, Jindal, Ispat and Facor. However, on Tata Steel's request, it was exempted from the condition.

The present government of Biju Janata Dal's Naveen Patnaik is now thinking of revoking the permission and it has sent the matter to its law department for opinion.

Following a long legal battle, the controversy over the Sukinda valley chromite mines came to an end in 1997 with the Supreme Court directing the state government as well as the Government of India to implement the Shrama Committee recommendations. The Shrama Committee had recommended that Tata Steel's leasehold should be reduced to 406 hectares taking into account its captive requirement. On February 15, 1997, following the court order, the lease was renewed on 406 hectares only and with that special condition.

According to sources, Tata Steel has raised 15.18 lakh tonnes of chrome ore during the past three years. Of that, it has sold 8.98 lakh tonnes in the domestic and export markets.

Meanwhile, the advocate general of Orissa, Mr Sovesh Ray, has opined that the accordance of the trading right to Tata Steel was in violation of the lease conditions. State finance minister Rama Krushna Patnaik too, in a letter to the Chief Minister, raised objection to the grant of permission to Tata Steel to trade in chrome ore. Mr Patnaik has pointed out that it was affecting the business of the state-owned Orissa Mining Corporation and as a result the state government is losing a huge amount. Mr Patnaik is reportedly planning to submit a memorandum to the state cabinet on this issue.

The government also came under sharp criticism in the state assembly on Monday for the delay in taking a decision on the matter.