HC sets aside Posco lease
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COMMENTS 
The Orissa High Court has set aside the state government’s recommendation of granting Posco a mining lease to the Khandadhar mines in Sundargarh, observing that the state’s mineral policy was “a mess”
Even as the Jagatsinghpur district administration moves to expedite land acquisition for Posco’s steel plant in Orissa, the Rs 51,000 crore project suffered a setback as the Orissa High Court, on July 14, 2010, set aside the state government’s recommendation for granting the South Korean steel major licence to prospect in the Khandadhar iron ore mines in Sundargarh district.
Adjudicating the writ petition filed by Geomin, a Karnataka-based company challenging the government’s decision to grant prospecting licence to Posco over 2,730.63 acres of iron ore, a division bench comprising Justices B P Das and B P Ray directed the state government to consider the grant of a mining lease for Khandadhar “afresh within four months”.
The court added that the state’s mineral policy was “a mess”.
In 2007, the Kudremukh Iron Ore Company, a public sector undertaking, approached the high court to challenge the state government’s recommendation of granting a mining lease to Posco India in Khandadhar. At the time, the government had allotted 6,204 hectares to Posco.
However, the high court referred the matter to the Centre in April 2007. The Centre’s ‘revision court’ -- a quasi-judicial body -- asked the state government to consider all applications afresh. After hearing the 200-odd applications for a licence to the Khandadhar iron ore reserve, the state government recommended Posco’s name again on January 9, 2009.
This was challenged by Geomin on grounds that the decision was taken without giving “equal opportunities to all applicants, especially the applications filed earlier”. The company said it was the first applicant for a mining lease at Khandadhar in 1991 when the mine was de-reserved.
In 1961, the Orissa government reserved the Khandadhar iron ore mines for exploitation by the public sector.
The Posco project, scheduled to be set up by 2016, has been delayed for several reasons including protests by local residents against land acquisition.
Posco signed a memorandum of understanding on June 22, 2005, for a 12 million tonne steel plant near the port town of Paradip, with an investment of $ 12 billion -- the largest foreign direct investment in India.
The project requires about 4,004 acres of land, of which 2,900 is forest land. The state government has received final clearance from the Ministry of Environment and Forests for acquiring the forest land. But there has been no progress on the ground as thousands of villagers have been protesting against the project, saying it will displace them from their homeland and ruin their betel leaf farms.
Source: The Telegraph, July 15, 2010
The Hindu, July 15, 2010
Business Standard, July 14, 2010
IANS, June 22, 2010