December 03, 2008

Jharkhand HC summons state over mining lease to Kohinoor Steel

The Telegraph reported that Jharkhand High Court has summoned Mr Jai Shankar Tiwary state mines & geology secretary to explain why Kohinoor Steel’s application for mining leases has been kept pending. The court observed that there is no explanation for the delay in deciding about the application for mining lease of Kohinoor Steel.

A high court bench directed Mr Tiwary to be in court on April 15th 2008, when the matter will be taken up for hearing.

Kohinoor Steel had signed the MoU with the state on July 18th 2005. The government pledged support to help it acquire land, coal block and iron ore mines. In return, Kohinoor agreed to invest INR 505 crore to set up a plan in phases. After signing the MoU, it purchased 35 acres near Chandil and started constructing the factory. By February 2006 it had finished the first phase of construction and set up a sponge iron plant, captive power plant and a steel melting shop with an induction furnace.

Kohinoor Steel also applied for the necessary permits to start production and submitted papers before the mines department for the lease. Kohinoor had applied for mining rights in the iron ore mines in Parambaljori, Barabaljori, Karampada, Setaruiya and Tatiburu in West Singhbhum. However, the government did not take any decision, resulting in heavy losses for Kohinoor Steel. When the government was not keeping its end of the bargain, Kohinoor went to court.

Adhunik Alloys, Abhijeet Infrastructure, Monet Ispat and Prakash Industries and Ispat Industries have also filed cases against the state for not providing them the required leases for mining iron ore.