Bhubaneswar July 17, 2016: The Odisha High Court has asked the state government to comply with its order, allowing Jindal Steel and Power (JSPL) to lift over 12 million tonnes of iron ore that the company had purchased from Sarada Mines (SMPL) in four weeks.

The directive came after the court found that its earlier order to the effect is yet to be complied by the state government. The court also asked the government to explain the reasons for the delay in implementing the order.

The High Court in April, this year, had asked the Odisha government to allow JSPL to transport its legally purchased iron ore fines and lumps lying within the leasehold area of SMPL to the company's palletisation plant at Barbil and railway siding.

JSPL had bought this material between 2004 and 2014 and had paid Rs 1,869 crore to the state government towards royalty and taxes for the same.

In its April 8 order, the court had also quashed the letter of the Deputy Director of Mines, Joda issued on March 31, 2014, directing stoppage of ore transportation.

Even after three months, the government has neither withdrawn the letter nor given the permission to JSPL to transport the raw material.

The dillydallying of the state government in complying with the court order has added to the woes of JSPL whose Odisha operation is under stress due to acute raw material crunch.

JSPL, which proposed to set up a 6 million tonne steel plant near Angul in Odisha, has already commissioned a two million tonne steelmaking capacity through DRI route. The company is in the process of adding 4 million tonne of steel capacity through blast furnace route which is likely to go on stream by the end of this financial year.

Besides, JSPL has set up a 10 million tonne pellet plant at Barbil in Keonjhar district. The total investment by the company in the state is pegged at around Rs 22,000 crore, creating direct and indirect employment for about 25,000 people.

"We are losing about Rs 200 crore per month in our Odisha operation due to acute raw material crunch," said a senior official of JSPL. He said, the company is forced to buy iron ore from the market while its stockpile of raw material is lying without use due to lack of government permission.

JSPL is buying 0.6 million tonne of iron ore from Odisha every month to feed its pellet plant and steel plant at Raigarh in Chhatishgarh.

Due to high operating cost, the company is forced to run its pellet plant and steel plant in Odisha at less than 50% capacity.

Meanwhile, sources said, as JSPL is a major buyer of iron ore from Odisha, the mining lobby is worried about possible impact on their business if it is allowed to use its stockpile of ore.

However, a senior government official requesting anonymity said, the government is examining the court order. "If required, we may go to the Supreme Court against the High Court order," he said.

(Source: http://www.business-standard.com/)