Setback to Posco steel project in Orissa

In a major setback to the proposedPosco steel project in Paradip, the Orissa High Court today set aside the state government`s recommendation for prospecting license in the Khandadhar iron ore reserve in its favour.

Last Updated: Jul 14, 2010, 22:13 PM IST

Cuttack: In a major setback to the
proposed Rs 51,000-crore Posco steel project in Paradip, the
Orissa High Court today set aside the state government`s
recommendation for prospecting license in the Khandadhar iron
ore reserve in its favour.

Allowing a writ petition of Geomin Minerals and
Marketing Ltd, a Karnataka-based private sector unit, a
division bench of justices B P Das and B P Ray directed the
state to take a fresh decision on recommendation of the
prospecting license (PL) to Posco-India giving preferential
right of consideration to the petitioner.

In January 2009, the Orissa government had recommended
to the Union government for grant of PL in favour of Posco in
an area of 2500 hectare of the Khandadhar iron ore reserve.
The recommendations were made in favour of the 12 MTPA
greenfield steel plant as per Section 11(5) of Mining and
Minerals (Regulation and Development) Act.

Terming Orissa government`s decision as arbitrary and
illogical, Geomin Minerals had challenged the government`s
recommendation in the high court claiming that it had made the
first application for mining lease in the area way back in
August 1991.

It was found that the preferential right for
consideration was available to the petitioner and the
recommendations made in favour of Posco was not valid, the
court observed in its judgement.

Urging the high court to restrain Orissa government
from considering applications for mineral concessions of later
applicants until disposal of the main writ petition, Geomin
Minerals had also sought an order to dispose of all its
pending applications before the state government in accordance
to its vested rights.

Viewing that the writ petition was not premature and
was maintainable due to unavailability of any alternative
remedy, the high court directed the state government to
dispose of all pending applications of the petitioner within
four months.

Besides the petition of Geomin Minerals, about a dozen
other similar petitions, including an intervention petition of
Visa Steel Ltd were tagged with it and were adjudicated over
jointly. The bench, however, rejected the contention of Visa
Steel and asked it to file an independent writ petition if it
has any cause of action.

-PTI

Tags: