In a blow to Rashtriya Ispat Nigam Ltd (RINL), the Odisha government has refused allotment of iron ore mines in favour of the navratna PSU. The state government has communicated its decision to the steel maker, citing its inability to allot iron ore mines since it has already decided to reserve all the balance mineral bearing areas in favour of its own PSU- Odisha Mining Corporation (OMC). “Your request for allotment/reservation of good iron ore blocks in Odisha in favour of RINL may not be considered as the state government through a resolution dated September 18, 2012 has decided to reserve the remaining area bearing iron ore for undertaking prospecting or mining operation through OMC”, B Behera, under secretary (steel & mines) wrote to RINL's chairman and managing director. RINL officials could not be reached for comments on the matter. RINL has a steel making capacity of three (3) million tonne per annum (mtpa) and is the second largest state-owned steel maker in the country after Steel Authority of India Ltd (Sail). The company, which had clocked its best-ever annual turnover in 2011-12 at Rs 14,457 crore, is in final stages of increasing its capacity to 6.3 mtpa. It may be noted that the state government had decided to reserve areas bearing iron ore, manganese, chromite and bauxite for undertaking prospecting or mining operations through OMC, the state controlled miner. The state government would invoke Section 17 A (2) of Mines and Minerals (Development & Regulation) MMDR Act-1957 for reservation of mine bearing areas. This would exclude the areas already held under any prospecting license (PL) or mining lease (ML) or areas reserved by the Central government under Section 17A (1A) of the Act for any Central PSU. OMC would make a fair and equitable distribution of minerals amongst the user industries for higher value addition in the state through appropriate long-term arrangements based on their requirements. The Director (mines) and director (geology) would furnish land particulars with boundaries in such areas for issuing notification in the official gazette. The state government would also move the Government of India for appropriate approval for this reservation as required under sub-Section 2 of Section 17 (A) of MMDR Act. The reservation of mineral bearing areas in favour of OMC is being planned to ensure value addition and maximum benefit for the local communities from extraction of minerals. The state government is emphasizing on value addition as it is expected to create employment opportunities, generation of revenues and setting up of ancillary and downstream industries. Besides, with many operational end-use industries grappling with raw material scarcity, the reservation of mineral bearing areas for OMC is expected to enable the state run miner to cater to their requirement. It may be noted that the expert committee constituted by the state government to broad base revenue had recommended leasing out of all mines containing iron ore, chrome, manganese and bauxite in favour of OMC. The state run miner, in turn, would supply the required quantum of raw materials to various industry, the expert panel suggested in its report.