[Ferro-Alloys.com] Tata Steel Ltd’s chromium mine in Odisha must remain shut till 10 July when a case filed by its competitor for redistribution of the mine comes up for its next hearing, according to an Odisha high court order reviewed by Mint.

The case relates to a petition filed by Indian Metals and Ferro Alloys Ltd (IMFA) to not renew the mining lease for Tata Steel’s Sukinda mine until IMFA’s request for allocation of more chrome reserves is heard, an industry executive said, requesting anonymity.

The Sukinda mine is spread across 406 hectares and IMFA says it could be redistributed to other companies as it is too much for Tata Steel alone, the executive said.

“Interim order dated 10.6.2014 shall continue till the next date,” said the brief order from the 19 June hearing at the high court. The directive was made available on Thursday.

The interim order on 10 June asked the Odisha government not to take any decision with regard to grant or renewal of the mining lease in respect of the Sukinda chromite mine in Jajpur district.

Chromium ore, used to make ferro-alloys and ferro-chrome, is a small but crucial ingredient that goes into stainless steel. The mine has the capacity to produce 2.4 million tonnes (mt) of ore, 0.6 mt of concentrate and 0.5 mt of pyroxenite ore a year, according to a report on the website of the environment ministry.

On the lines of IMFA, other ferro-alloys makers Balasore Alloys Ltd and Ferro Alloys Corp. Ltd, whose mines are situated in the vicinity of Tata Steel’s, have filed similar petitions, executives in these companies said, and chances are all  the petitions may be clubbed.

“Balasore Alloys have requested that it require more chrome ore in view of its business blue print and as such before making allotment or renewal of adjacent mine, it should be given opportunity of being heard by the state government and till then no renewal or allotment to be done of this mine,” managing director Anil Sureka said.

Tata Steel did not respond to an email sent on Thursday seeking comment.

The firm’s Sukinda mine is troubled from other quarters as well. On 16 May, an interim order by the Supreme Court under an illegal mining case made by lawyer-politician Prashant Bhushan closed many mines in Odisha that were working under deemed or temporary extension of their mining leases.

While the iron mines of Tata Steel were reopened under an express order of the Odisha government a few days later, the Sukinda mine remains shut.

Also, the forest advisory committee of the environment ministry has recommended diversion of forest land that falls under Tata Steel’s Sukinda reserve for mining, but has applied some conditions to the clearance.

It said the company can carry out mining only after it secures orders to go ahead from the state government. A government official who requested anonymity said this is protocol that the environment ministry is following with regard to mining clearances in Odisha.

“Even though the committee has given a go-ahead, they have to get an order from the state government, which says that it is in the interest of mineral development in the country, to renew this lease,” the government official said.

If Sukinda mines remains closed beyond July, there may be a shortage of ferro-chrome at Tata Steel’s plant, an expert said. However, of the 10mt of its capacity, only a minor portion is dedicated to making stainless steel.

“It is a small quantity of ferro-chrome that is needed at the steel plant and this can be sourced from the local market or even imported,” said one analyst who declined to be named.

“Their merchant sales of ferro-chrome supports Tata Steel’s revenue, but in a small way,” said Giriraj Daga, a senior research analyst at Nirmal Bang Equities Pvt. Ltd.

Tata Steel’s ferro-alloys and minerals division achieved the highest ever ferro-chrome production of 218,000 tonnes in 2012-13, the company’s annual report shows.

A similar legal fight for the chromium ore reserve had taken place in the 1990s. In 1993, under a Supreme Court order, part of Tata Steel’s then holding of 1,261 hectares was redistributed, following which its holding came down to 406 hectares.

Now its competitors want it to be redistributed again as with growth on the horizon.

“Our requirement is growing, so the government has to hear us,” said an official working in one of the ferro-alloy companies, not wanting to be named. “Tata Steel has applied for a third renewal of its mine lease, but other producers have now stepped into the picture citing the reserves of 85 mt as being far in excess of what the former requires for captive consumption. It should be seen if it is truly in the interest of mineral development that they get the entire 406 hectares.”

• [Editor:Yueleilei]