Mining issues: Orissa, Centre to discuss, at last

After a gap of 9 months, the Orissa government and the Centre has begun to discuss mining issues again instead of as a stand-off. State chief secretary BK Patnaik met Union steel secretary DRS Chaudhary in Bhubaneswar on Friday. The last time Orissa and the Central government officials met for a related issue was in March this year about Posco's 12 million tonne steel project. That meeting came just before Prime Minister Manmohan Singh left on a tour of South Korea, where Posco naturally figured.

But since then there has been little development with Posco waiting for the Orissa government to renew its MoU that expired in June 2010 and restart the land acquisition process, stalled since June 2011. In between, the state has served a notice on several companies alleging illegal mining. To regularise the same it has demanded payment of additional royalties. Matters are further complicated as the MB Shah Commission on illegal mining has pulled up the state on the issue too.

Meanwhile, not just Posco, even some public sector projects have not moved much. For instance an RINL application for mining lease is stuck with the state government for the last two and a half years. The state has insisted there should be value addition within the state borders which means the company has to set up at least something like a pelletisation plant for the ore to be processed. Friday's meeting is then important not just for Posco but several other big-ticket steel and mining industries too. Major potential investors in the state include ArcelorMittal, Steel Authority of India Ltd, Rashtriya Ispat Nigam Limited, Tata Steel, Jindal Steel and National Mineral Development Corporation. Under chief minister Naveen Patnaik it was expected the state's agri-based economy would become more diversified. But 8 years and several MoUs later Orissa has so far achieved steel production capacity of only 12.66 million tonne per annum out of India's 69.5 million tonnes (2011-12).

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