Bhushan Steel seeks contempt proceedings against Orissa

Written by Indu Bhan | Indu Bhan | New Delhi | Updated: Feb 6 2013, 05:48am hrs
Says state didnt comply with SC order on grant of iron ore

Bhushan Power & Steel (BPSL) has asked the Supreme Court to initiate contempt proceedings against the Orissa government for failing to comply with the apex courts order that asked it to recommend BPSLs case for grant of iron ore reserves to the Central government. The compamy needed the iron ore reserves for the companys 2.8- million-tonne integrated steel plant at Lapanga.

BPSL claimed that the state government has only recommended grant of 96 million tonne of iron ore reserves in Keonjhar (Thakurani area) and is yet to send the recommendation for an additional 128 million tonne in Keora (Sundergarh district) to meet its requirement of 1.6 million tonne for 50 years.

On the other hand, the state government said that a recommendation had been made to the Central government for grant of mining lease to BPSL in December last year for Thakurani-A block and the same is adequate to feed the requirement of a 2.4-MTPA steel plant for 25 years.

A bench headed by chief justice Altamas Kabir posted the matter for hearing on March 11.

Saying that the state was obliged to make recommendation to the Centre for grant of iron ore mines, BPSL claimed that it had invested around R20,000 crore in its integrated steel plant.

BPSL senior counsel Mukul Rohtagi submitted that although about 10 months have lapsed since the judgment, the state government has only partially complied with the orders, compelling the company to procure the iron ore from the open market at exorbitant prices.

The whole purpose of setting up the plant was that BPSL will have captive mines with assured supply, making the production economically viable, the contempt petition stated.

As for mining leases in Sundargarh district, a part of the area applied for overlaps with area earlier applied for by Larsen and Toubro and Tata Iron and Steel Company, and almost entirely falls within the areas notified under Rule 59(1) of the Mineral Concession Rules, 1960.

Arguing that the state had not deliberately flouted the orders, senior counsel L Nageswar Rao, appearing for the state, said that the Department of Steel and Mines is faced with difficulty in processing BPSL's recommendation due to overlapping areas.

He further said that that several applications with requests for overlapping areas are embroiled in pending litigation and, therefore, the state cannot be held responsible for delays.

The Supreme Court, while setting aside the Orissa High Court judgment that refused to interfere with the state governments decision asking BPSL to sign a fresh MoU, had in March last year directed the Orissa government to take appropriate steps to act in line with terms of the MoU signed with the firm on May 15, 2002.