SAIL, Tata Steel hit mining hurdle in Jharkhand

Jayanta Mallick Kolkata | Updated on October 10, 2014 Published on October 10, 2014


Govt asks the firms to pay ₹6,000 crore for operating mines without lease renewal

The Jharkhand Government has demanded a heavy price – estimated at ₹6,000 crore – from Tata Steel and SAIL, for operating iron ore mines in the State without proper lease renewal.

SAIL may have to pay around ₹2,000 crore before it could execute a fresh lease agreement for its Gua mine, while Tata Steel may be required to fork out upwards of ₹4,000 crore for the Noamundi mine.

Though the lease agreement for both the mines expired some years ago, they were operating on deemed extension granted by the State Government, following the old version of the mining norms (Mines and Minerals (Development and Regulations) Act, 1957, and Mineral Concession Rules, 1960).

SAIL’s lease had expired in February 2009, while Tata Steel’s renewal fell due in December 2012.

However, a Supreme Court-guided recent amendment in the law ended the practice of deemed extensions, forcing the companies to close the mines on September 5.

Conditional offers

In separate communications this week, Anand Mohan Thakur, Deputy Secretary, Department of Mines and Geology, asked the steelmakers to pay for the total value of the minerals extracted since the expiry of the leases.

The conditional offers were made on the premise that since the State Government had not renewed the leases, the steelmakers carried on with “unlawful” mining activity.

On September 4, the Government ordered that miners, including captive miners such as SAIL, Tata Steel, Hindalco, Hindustan Copper and Uranium Corporation, shut their operations.

All these mines were continuing operations on “deemed extension” of the lease period in absence renewals even though the applications for lease “renewals” had been submitted in time, sources pointed out.

The Jharkhand Government’s current move bypassed the renewal route and opted for fresh lease deal offers.

The State Government has also initiated the process for fresh agreements with Hindalco, Hindustan Copper and Uranium Corporation, sources said.

Published on October 10, 2014
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