Odisha yet to take a call on Rio Tinto proposal

Mumbai: Odisha is yet to take a decision on the proposed USD 2-billion investment by Rio Tinto in the state and currently examining the issue, state`s Steel and Mines Minister Raghunath Mohanty said.

"We have not taken a decision yet and currently the proposed investment is being examined by a high-powered committee," Mohanty told PTI over phone from the state capital Bhubaneswar.

When asked how long will it take for the government to decide, he declined to give any timeframe.

The Australia-based Rio Tinto Group, which is the world`s third largest mining company, is planning to invest USD 2 billion in a joint venture project with Orissa Mining Corporation(OMC) and NMDC, a public sector unit.

The Australian company is expected to hold 51 percent stake in the proposed venture with 44 percent to be held by OMC and the rest with NMDC.

According to reports, the Australian miner seeks to produce around 15 million tonne iron ore from the eastern state. Earlier, a separate joint venture between Rio Tinto and NMDC was stalled in 2010 due to lack of synergies.

The domestic iron ore industry has been badly hit in recent times due to clamping down on illegal mining in major producing states like Karnataka and Odisha apart from Goa.

According to the Federation of Indian Mineral Industries, iron ore output may drop by around 50 percent this fiscal from 226 million tonne last fiscal.

Odisha, which produces one-third of the country`s iron ore, earlier asked the Centre to levy new tax on mining profits, higher royalty along with ban on exports to encourage more domestic intake.