Odisha High Court today makes a judgement in favor of state government on reserving 50% Iron ore for state based industries. Odisha Government has the right of pre-emption, said the Court.
In a major respite to the Odisha based mineral based industries that are reeling under severe raw material crisis, the Odisha High Court today has given its verdict in favor of the Odisha Government’s 50:50 order. The order mandates to reserve 50% of the minerals produced for the inside state industries.
“The hon’ble Court has said that the state government has the pre-emption right for sale of minerals to the state based industrial units,” said Mr. PL Kandoi, President of All Odisha Steel Federation (AOSF).
In December, 2012 the Odisha Government had come up with the regulation which asked the merchant miners to sale 50% of their ore to state based industries. Meanwhile, the captive miners were excluded from the order.
However, the miners have been opposing the regulation saying it restrictive and there is no such provision in the MMDR or MCR act. Subsequently, the miners under the banner of Federation of Indian Mineral Industries (FIMI) had moved to Odisha High Court.
How will it impact Supply of Iron Ore from the State
Odisha is the largest producer of Iron ore in the country with an annual production of 62-63 MnT. With 50:50 rule, supply of Iron ore for steel mills based outside state will be little tight.
In FY14, big steel maker like JSW steel, which source almost 4 MnT from this state has suffered due to 50:50 rule. DRI manufacturers located outside Odisha will bound to use more Pellets over lumps.
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