Channelise sale of iron ore to stand-alone local industries: Rajesh Verma

"The state government hereby directs that at least 50 per cent of the iron ore lumps and 50 per cent of fines from the mines in any month, but not put to captive use by the lessees, shall be sold to the stand-alone mineral based industries located in the state," Steel and Mines Secretary Rajesh Verma said in an official communication.

This would be done in an equitable manner on payment of the prevailing fair market price by the user industries to the mining lessees, Verma said.

The state government within the ambit of the power conferred to it under provision of the rules of MMDR Act, 1960 can made such arrangement to save the local industries facing shortage of raw materials, an official said to a question on the legality of such a decision.

Stating that the instructions would be effective from December, Verma said the arrangement would continue till further order by the state government in this regard.

The steel and mines department authorised deputy director of mines and the mining officers in charge of mining circles to issue notices to the lessees of the respective circles on behalf of the government for the purpose.

The secretary of steel and mines also directed the director of mines to inform the state government within one week about the action taken in the matter.

The state government said, in spite of having adequate reserve of iron ore, representations are being received from the iron and steel industries about scarcity of raw materials.

"On account of shortage of of raw material, while a few of them (industries) are facing closure, others are experiencing low utilisation of their existing capacity. There is every likelihood of such situation having adverse socio-economic consequences such as unemployment," Verma said.

He also admitted that "such" situation will also have an adverse impact on the investment climate and industrialisation process in the state.