SC concludes hearing in Posco mining case

* In January 2013, the Supreme Court tried to get the warring parties (Geomin minerals, POSCO and the Orissa government) to agree to let the central government decide on the prospecting licenses. POSCO readily agreed, once again taking recourse to the bloated employment generation claims. Geomin objected.

* Hearing ended on March 21st, all parties to give written submissions by April 5.


Centre may get to decide on Posco case, says Supreme Court

NEW DELHI: The Supreme Court on Tuesday indicated that it may lob the issue of granting a prospective iron ore licence to South Korean giant Posco back to the central government.The top court raised this possibility and sought responses on Wednesday from all parties fighting over the grant of the Khandadhar mines in Odisha to Posco.The top court is hearing cross appeals filed by local company Geomin and Korean giant Posco against a high court decision cancelling the prospecting licence awarded to Posco in the area.

Geomin challenged the decision to award the licence saying that it violated rules. The state government jumped the queue of applicants, estimated at 217, to favour Posco, Geomin claimed. The state claimed that Posco had been selected for its technological superiority and the investments and the jobs it has committed to bring into the state. Posco has committed to investing Rs 52,000 crore in the state.

The HC set aside the iron ore licence case and asked the state to look into the issue afresh. Geomin filed an appeal in the Supreme Court against the HC decision denying it any consequential relief while ruling in its favour. Since then several other steel majoRs have joined the fight.

PSU major Kudremukh Iron Ore is a party as well and so is Jindal Steel and Power. On Tuesday, a bench, comprising Justices RM Lodha and SJ Mukhopadhaya, which has been hearing the appeals, suggested that the Centre has a look afresh at the issue and take a call on the state government’s recommendation.

“Should the Centre not decide on the merits as per law?” Justice Lodha asked. “That would be appropriate.” The high court has taken away the Central government’s power by way of judicial review,” he added. The state government, through counsel Rakesh Dwivedi, also backed this suggestion.

Since iron ore was a major mineral, the state’s recommendation was not final till the Centre cleaRs it, he said. “All these issues may be raised before the Centre.”

But Geomin’s lawyer Jaideep Gupta stalled for more time to reply to the suggestion. “The Centre will also see whether anyone has been rightly or wrongly rejected,” Justice Lodha said, but Gupta said that he would seek instructions on it.

“This exercise by the Centre is unilateral. Who will advance such arguments,” Gupta contended. The court will take a decision on this on Wednesday.


Geomin opposes central government review of Kandadhar licence

NEW DELHI: Odisha-based Geomin Minerals, which has been locked in a legal battle with Korean giant Posco for an iron ore prospecting licence in the Kandadhar mines in Sundergarh district, on Wednesday opposed a Supreme Court move to ask the Centre to make an assessment of all potential contenders for the licence.The company had first challenged the Odisha government’s recommendation to allot the prospecting mining licence to Posco in the High Court, which cancelled the mine and asked the state to conduct the exercise afresh. Both Geomin and Posco then moved the HC against the decision.Geomin contended that it deserves preferential consideration as it had applied earlier than Posco which only sought a prospecting licence in 2005.

Both the state and Posco have argued in the top court that Posco was a better bet because of the huge investment and employment it would bring in to the state. At least 18,000 direct jobs and an overall employment of 2.7 lakh and 52,000 crore by way of investment.

“This is extremely attractive and it would be a huge betrayal of people’s trust if the state did not take it up in public interest,” senior counsel KK Venugopal argued.

As a way out of the stalemate, a top court bench, comprising Justices RM Lodha and SJ Mukhopadhaya, had on Tuesday asked both sides to respond to a suggestion on whether the issue of grant of the prospecting licence should be sent back to the Centre.

The state government can only recommend a prospecting licence in case of a major mineral but it was up to the central government to take the final call on this, the state had argued. Posco also threw its weight behind the state’s position. On Wednesday, Odisha questioned Geomin’s credentials on several grounds, including the fact that the company had not offered to put up a plant till 2007 and had not given any firm commitment on the investments. “It applied first as a trader,” state counsel Rakesh Dwivedi argued. “All relevant considerations were taken note of, separate analyses made and a conclusion drawn,” he said, prior to the recommendation in favour of Posco. The Centre has to take a decision on this before Geomin can agitate its case in court, the state argued. But Geomin opposed this. “The court should not remit the issue to the Centre but decide it,” Geomin counsel Jaideep Gupta said. He said only 182 hectares of the prospecting licence sought by the company overlapped with the area allotted to Posco. Seven other applications were pending with the state.

“These have not been disposed of because of malafide (by the state),” he charged. “It is difficult to go to the Centre as it has already taken a decision that no preferential right accrues after the change (an amendment to the law in 1991). The Centre will not be able to correct the error.” The top court had suggested that the central government take a call on the licence after hearing all applicants through representations.


SC concludes hearing in Posco mining case. Asks state, Posco and Geomin to give written submissions by Apr 5

The Supreme Court on Thursday concluded two year long hearing on a case related to grant of mineral prospecting licence (PL) for Khandadhar iron ore mines in favour of Posco and reserved the judgment.It has directed all the parties concerned, such as the Odisha government, Posco-India and Geomin Minerals and Marketing (P) Ltd to give their written submissions by April 5. Earlier, the division bench of Orissa High Court in July 2010 had set aside the state government’s January, 2009 recommendation for granting PL in favour of Posco after Geomin Minerals and Marketing (P) Ltd contested it in the court. The court had directed the government to reconsider the applications of other aspirants for the same mine who had submitted their applications prior to Posco.

Geomin and other claimants for the property had argued that the state government did not consider their applications, some of which were submitted as early as 1991 and instead, recommended Posco’s case, which applied in 2005.

The state government and Posco had moved Supreme Court against the decision of the High Court in October, 2010. The Khandadhar mines is spread over 2,500 ha area and is estimated to have 600 million tonne high grade iron ore deposits.

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