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PIL seeks scrapping of Tata Steel's iron ore mining rights in Odisha

 Not only is Tata Steel hoarding iron ore reserves in excess of what it requires, the PIL alleged that the company is exporting iron ore, which was intended for the domestic steel industry. (Bloomberg)Premium
 Not only is Tata Steel hoarding iron ore reserves in excess of what it requires, the PIL alleged that the company is exporting iron ore, which was intended for the domestic steel industry. (Bloomberg)

  • The PIL says Tata Steel's iron ore mining rights in Odisha violates India's MMDR Act
  • Tata Steel operates the Kalingnagar steel plant in Odisha, as well as Bhushan Steel's plant it aquired last year

Mumbai: A public interest litigation (PIL) was moved in the Odisha high court on 25 February requesting Tata Steel Ltd be stripped of its additional iron ore mining rights in the state on the grounds that it violates the provisions under the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR).

According to the PIL document, seen by Mint, out of the 56 sq.km of mining lease area held by steel companies for captive use in Odisha, Tata Steel has six iron ore and manganese mines totaling 49.61 sq.km. This, it said, violates Section 6 of the MMDR Act, which mandates an upper limit of 10 sq.km of mining leaseholds that can be allotted to a single company in a state.

In March 2018, Business Standard had reported that the Odisha government had written to the centre recommending that it increase the limits on mining area from 10 sq.km to 75 sq.km. The recommendation was based on Tata Steel’s request to the state government to increase the limit to 125 sq.km.

A Tata Steel spokesperson said: “As the matter is sub judice we have no comments to offer." Tata Steel operates a 3 million tonne per annum (mtpa) plant at Kalinganagar and had recently acquired the 5.6 mtpa capacity plant of Bhushan Steel from the bankruptcy court. It is expanding capacity at the Kalinganagar plant to 8 mtpa, which is expected to be completed by 2020.

However, the company currently holds iron ore production capacity of 28 mtpa and reserves of 438 mt, the PIL said. This is far more than it requires for its steel capacity of 14 mtpa (even after expansion) in the state, it further argued. About 1.6 tonne of iron ore is required to produce 1 tonne of steel.

Not only is Tata Steel “hoarding" iron ore reserves in excess of what it requires, the PIL alleged that the company is exporting iron ore, which was intended to be used in the domestic industry. “Iron ore mines in the state are concentrated in the hands of one entity." The PIL sought an “investigation into gross violation of the provisions and requirements of Section 3 of the MMDR Act".

It also said that Tata Steel should be restrained from mining in area excess of 10 sq.km.

Tata Steel is the lowest-cost producer of steel, globally, because of its captive iron ore reserves.

In May 2018, the Delhi high court had restricted the Odisha state government from proceeding with an e-auction of 2 iron ore blocks because one of the bidders was not eligible, as its mining lease was beyond the permissible limit. The court, however, had not named the bidder.

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