Reserving mines for OMC may drive away investors: SGAT

Last Updated: Fri, Jan 11, 2013 19:30 hrs

Reservation of mineral bearing areas in favour of state controlled miner- Odisha Mining Corporation (OMC) will dampen mineral development and shy away potential investors, according to Society of Geoscientists & Allied Technologists (SGAT), a body dedicated to promotion of mineral development.

In a memorandum submitted to the M B Shah Commission of inquiry probing into large scale mining of iron ore and manganese without lawful authority, SGAT said, “Laying bare large mineral areas through reservation will encourage illegal mining, destruction of forest growth and provide safe haven for mafia elements and Naxals which the state government will certainly not like to happen.”

SGAT also questioned the basis of reserving balance mineral bearing areas for prospecting or mining operations for OMC when the state mining PSU has been imposed a penalty of over Rs 2,000 crore for excess production.

“How can the steel & mines department consider to entrust OMC to work on additional areas through the route of reservation when OMC has been found guilty of illegal mining,” SGAT questioned.

The steel & mines department, through a resolution dated September 18 last year, had decided to reserve all balance mineral bearing areas in favour of OMC.

“This is probably the first time that a state government has resorted to such a omnibus reservation of all major mineral bearing areas for working through its own PSU,” SGAT stated in its memorandum to the Shah Commission.

Out of 35 leases held by it, OMC is currently operating only four mines.

“The first and foremost task for OMC is to activate the 31 leases lying dormant for years. Substantial improvement and up-gradation of infrastructure, manpower, expertise, research & development (R&D), value addition, environment management and CSR (corporate social responsibility) are called for before OMC can venture into the domain which the department of steel & mines has decided to thrust upon it,” the memorandum added.

Stating that only the private sector mines can sustain the end-user industries, SGAT said, to access the areas reserved for working, OMC has to go through the time-taking route of obtaining statutory forest and environment clearances. SGAT suggested that the state government can impose a condition by virtue of of Rule 27 (3) of Mineral Concession Rules-1960 whereby the standalone mines can be called upon to supply required quantities of ore to the MoU (memorandum of understanding) signatories.

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