Govt of India seeks clarification on L&T mines lease recommendation

Government of India has sought more clarification from the Odisha government on its recommendation to grant mining lease (ML) of Kutrumali and Sijimali bauxite mines to Larsen&Toubro (L&T).

In June, the state government recommended the Centre to grant ML of the two mines after L&T committed to set up a three million tonne per annum (mtpa) aluminium plant in Odisha. The two bauxite mines, located across Rayagada and Kalahandi districts, have combined reserve of around 300 million tonne of bauxite. "In a recent communication, the Centre mentioned the state's application for ML in favour of L&T as 'incomplete'.

It has asked to submit fresh proposal by conducting the differential global positioning system (DGPS) survey of the mines. The survey is on and the state would submit the report in a week," said a senior officer of the steel and mines department.

Besides the DGPS report, the Centre has sought certain minor clarifications on both the mines. The officer, however, refused when asked whether the Centre has raised any objection on end use plant of the company. "The state has recommended ML of the mines in favour of L&T on a condition. The minerals from the two mines would only be utilized in its (L&T) own plant and cannot be exported," the officer added.

The state government had granted prospecting license (PL) of the two mines in favour of L&T in 1992, which expired in 1994. In 2005, L&T had proposed a joint venture with Dubai Aluminium (Dubal) for setting up of Rs 30,000 crore aluminium complex comprising three million tonne per annum (mtpa) alumina refinery at Rayagada and also a 1.5 mtpa aluminium smelter plant and a captive power plant (CPP) in western Odisha. So far, the project has been a non-starter as Dubal had backed out of it.

In 2012, the L&T signed an agreement with London-based Vedanta Aluminium Limited (VAL) to utilize the ore from the two mines in its Lanjigarh plant, which is facing acute shortage of raw material. As the state did not allow the plan, the L&T has committed to set up its own plant in the state. The detail of investment plan by the L&T group is yet to be known.