Business Standard, Dec 4, 2008
The joint venture (JV) agreement signed between the state-owned Orissa Mining Corporation (OMC) and Vedanta group for mining of bauxite at Niyamgiri Hills in Kalahandi district will be modified soon.
The steel and mines department has sent the modified agreement to the law department for vetting and once cleared, it will be sent for the approval of the chief minister.
The modified agreement will be signed after the approval by the government, official sources said.
“The draft agreement has been sent to the law department for vetting and the modified agreement is likely to be signed soon”, a senior official of the state steel and mines department told Business Standard.
Vedanta Alumina Ltd. (VAL) had signed a joint venture agreement with OMC on 5 October 2004, for developing bauxite mines at the Niyamgiri Hill near Lanjigarh in Kalahandi district and the Khambasi hill in adjoining Rayagada district.
The bauxite was to be used in the company’s one-million-tonne alumina refinery at Lanjigarh. As per the agreement, VAL held 74 per cent stake in the joint venture with the rest 26 per cent vested with OMC. Vedanta Alumina, through its majority holding, was supposed to control and oversee the day-to-day operations of bauxite mining.
However, the Supreme Court, in its judgement on November 23, 2007, directed that since Vedanta Resources Plc is not an Indian company, OMC should better enter into a joint venture agreement with an Indian subsidiary of Vedanta. In pursuant to this direction, it was decided to replace Vedanta with Sterlite Industries India Ltd (SIIL) in the JV agreement with OMC.
Accordingly, SIIL, OMC and the Orissa government filed affidavits accepting the directive of the Supreme Court, which among other things related to formulation of a rehabilitation package, payment of Rs 55 crore for wildlife management plan and Rs 12.20 crore towards tribal development and establishment of a special purpose vehicle (SPV) for peripheral development with annual contribution of Rs 10 crore or 5 per cent of the profit by SIIL.
After compliance of these conditions laid down by the Supreme Court, the court finally gave its approval for mining of bauxite by SIIL-OMC JV in Niyamgiri Hills on August 8, this year.
All provisions of the Supreme Court judgement have been incorporated in the modified agreement to be signed soon, sources added.
Meanwhile, the process for formation of the SPV by the Orissa government with OMC and SIIL as partners to take care of scheduled area development is on, says P. K Panda, vice-president (mines), Vedanta Aluminium Limited.
He said, the SPV will be chaired by the Revenue Divisional Commissioner (RDC) of the Southern Division and will have collectors of Kalahandi and Raygada as members. SIIL will have 4 members in the SPV which among others will have Conservator of Forests (CoF), Bhawanipatna and one nominee from OMC as members.
It will look after the development of the scheduled areas in 50 kilometre radius and will work for the development of health, education and agriculture sector of the locality. The SPV will be incorporated under the Companies Act, 1956.
The accounts of the SPV will be prepared by the statutory auditors of OMC and will be audited by the Auditor General of Orissa every year. Besides, the SPV will be in control of the total mines management.
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