Government to form JV with Sterlite for bauxite mining

The Pioneer, Jan 9, 2007

The Orissa Government has agreed to join hands with Sterlite Industries India Limited (SIIL) to allow a Joint Venture (JV) for bauxite exploitation from Niyamgiri hills. Complying with the rehabilitation package suggested by the Supreme Court, the State Government has asked the Orissa Mining Corporation (OMC) to enter into the JV agreement with SIIL.

The apex court on November 23, rejecting the application filed by the Vedanta Alumina Limited (VAL) to go for mining in Niyamgiri hills, had asked SIIL to agree to comply with the suggested rehabilitation package. SIIL, in the meantime, prayed the State Government to allow them to go for the suggested package. Allowing SIIL's prayer, the Government said the State would float a Special Purpose Vehicle (SPV) for Scheduled Area Development of the Lanjigarh alumina project, which VAL is setting up with an investment of Rs 4,000 crore. VAL is the subsidiary of SIIL as per documents available with the court.

Now the State Government, OMC and SIIL will float the SPV under the banner of Lanjigarh Scheduled Area Development Foundation (LSADF). Accordingly, in the Registrar of Companies, LSADF will be registered under Section 25 of the Companies Act, said sources. The Government will have 26 per cent, OMC 25 per cent and SIIL 49 per cent of shares.

On April 1 every year, SIIL would deposit Rs 10 crore or 5 per cent of its annual profit before tax and interest, whichever is higher, in the coffers of LSADF, which would take up development projects in a radius of 50 km of the project. The SPV would undertake projects of education, health, childcare, child and mother development, infrastructure, self-help group, entrepreneurial development, communication, irrigation agriculture and farming.