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State, PSU fight leave 208 MT ore untapped

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SummaryLease renewal delay: OMDC, Orissa blame each other.

If mining irregularities and the consequent court decisions have hit the iron ore production in Karnataka and Goa hard, in another state, a central PSU with estimated reserves of 208 million tonnes (MT) of this key input for steel-making and unfettered by any such row is sitting on them.

The top management of Orissa Minerals Development Company (OMDC) and the state government are blaming each other for the delay in renewing the PSUís mining leases that had begun to expire roughly a decade ago.

Amid the bickering, OMDCís ore production is now almost negligible while in its heydays a decade ago it was the countryís third-largest ore producer with an output of roughly 3.2 MT. Only public-sector NMDC and private miner Sesa Goa used to produce more than OMDC, which is a step-down subsidiary of RINL, Indiaís second-largest steel PSU. Apart from the inability of OMDC top brass and the state government to resolve their differences, OMDC, by its own admission, is also constrained by lack of expertise in diverse areas.

The impasse is despite the fact that renewal of the leases would give OMDC access to mineral-rich areas aggregating 4,365.262 hectares, located at Barbil in Keonjhar district of Orissa. If the PSU, which got listed on the BSE in August 2010, resumes its mining activity and regains its past glory, the countryís iron ore production and exports would receive a boost. Indiaís iron ore production plummeted from 219 mt in 2009-10 to 140 MT in FY13 owing to a ban following the illegal-mining scam. Export earnings from ore have come down to a trickle from $6 billion in 2009-10.

OMDCís mining activities have come to a standstill despite its huge cash reserves of Rs 678 crore as of end-March. The lease areas mentioned above are also estimated to hold manganese ore reserves of 44 million tonnes. A senior official at the Orissa mining department said the OMDC management isnít showing any interest in getting some statutory clearances necessary for renewal of leases. AP Choudhary, RINLís CMD, who is also chairman of OMDC, denied any lapse on the part of the company, adding that

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