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Odisha may go to court over new mining law

The central government had its way in enacting a new law for mining through the ordinance route but states aren’t all on board. Odisha has said if its concerns were not addressed, it would go to court.

Prafulla Kumar Mallik, the state’s minister of steel and mines, has said the Centre must not ignore international commitments, and memoranda of understanding with companies like Posco should be honoured. Mallik was in Delhi to attend the conference of state mines ministers on the ordinance.

Though Union minister Narendra Singh Tomar did not answer a specific query on Posco’s case, Anup Pujari, mining secretary, said all forms of letter of intents given to companies prior to the enactment of the ordinance would stand but added a memorandum of understanding was not a letter of intent. Hinting that Posco, too, would have to come through the bidding route, as in the ordinance’s rules.

In the case of second renewals and subsequent extensions of mining leases, Mallik maintained the Union government should provide in the law for auction of all mines. According to the ordinance, miners asking for renewals would now get 15 years as extension in the case of captive mines and five years for other mines. “Miners who have second and subsequent extension should not be given the opportunity to make super-natural profit,” Mallik told reporters here.

He said his state wanted to provide a higher amount for benefit sharing with local people through the various District Mineral Foundations (DMF). The ordinance has capped the benefit sharing with locals (payment to DMFs) at a third of the royalty paid by a mining company. Goa, however, is opposed to such a levy. A senior state official said companies operating in Goa are required to give 10 per cent of the sale value of minerals for local area development under a court directive. “We want that companies operating in our state be exempted from clause 8 of the Ordinance,” he said.

Mallik also opposed the government’s decision to extend the validity of every existing lease to 50 years. Such sections, he said, modifies the basic structure of mineral administration. “Bringing these amendments behind the back of the state governments render the consultation process with states to a farce,” he said.

The minister, in his speech at the conference, also questioned a mining company’s being granted a first right to refusal for a lease in case it already holds the reconnaissance permit or prospecting licence. “This further restricts the number of leases which could be settled by auction and needs to be reconsidered,” he said.

Goa supported the ordinance on most counts but wanted exemption for companies in the state which have already got an extension. “Application of the ordinance on leases which have been granted extension will not stand legal scrutiny. So, we have asked the Centre to clarify in the explanation that those granted an extension will be governed by the earlier provisions,” said a senior state official, requesting anonymity.

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