BUSINESS

Odisha govt. to scrap deals with Rio Tinto, Sesa Sterlite, Hindalco

The Odisha Government has decided to scrap joint venture agreements with global major Rio Tinto, Vedanta group firm Sesa Sterlite and Aditya Birla group-owned Hindalco Industries, an official said on Wednesday.

The Odisha Mining Corporation (OMC), run by the Odisha government, had inked joint ventures with Rio Tinto, Sesa Sterlite and Hindalco.

While the government had decided to scrap the joint venture with Anglo-Australian mining major Rio Tinto, the OMC has issued show-cause notices to Sesa Sterlite and Hindalco, asking them to show reasons for not cancelling the joint ventures, said the official.

“We have sent show-cause notices to Hindalco and Sesa Sterlite. They have been asked to send their replies within two weeks,” said a senior executive of OMC. The government has already communicated the termination of the joint venture to Rio Tinto.

The government’s decision is likely to come as a blow to the mining spectrum, especially when the companies have set up their projects on the assurance of raw material to run their end use plants in the State.

The OMC had inked a joint venture with the Anglo-Australian company in 1995 to develop Gandhamardhan and Malangtoli iron ore deposits in Keonjhar and Sundergarh districts with a mining capacity of 25 million tonnes annually. However, the project could not take off ever since the signing of the joint venture pact.

In the two joint ventures with Sesa Sterlite and Hindalco, the OMC had formed two companies. South West Bauxite Mining Company (Pvt) Ltd. was formed for supply of bauxite from deposits in Kalahandi and Rayagada districts to feed the aluminium refinery of Vedanta Aluminium.

Similarly, East Coast Bauxite Mining Company (Pvt) Ltd. was formed for the development of Kodingamali bauxite mines in Koraput district supplying raw material to the alumina refinery of Hindalco. — IANS