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SC throws out steel companies Jharkhand mining plea
Clean Media Correspondent
New Delhi, July 27 (CMC) Six steel makers were in for a huge jolt on Thursday after the Supreme Court dismissed their lawsuits challenging the Centre’s decision to reserve at least 6,400 acre iron ore bearing area in Ghatkuri in Jharkhand for excavation by public sector undertakings, or PSUs.
The companies include listed players Monnet Ispat & Energy and Ispat Industries (now JSW Ispat Steel).
Monnet Ispat shares fell over 15% on the news, on BSE. Shares of JSW Ispat, however, recouped losses to close up nearly 2%.
The other companies are Adhunik Alloys and Power, Prakash Ispat, Jharkhand Ispat and Abhijeet Infrastructure.
As per the facts of the case, the Union government had in 1969 reserved the 2,590 hectare (6,400 acre) patch — estimated to contain as much as 600 mt iron ore reserves --- for mining exclusively by PSUs.
However, in 2006, the Shibu Soren-led Jharkhand government assured nine companies — bypassing five PSUs which were among around 150 applicants — that they could undertake mining in the area and sent its recommendation to the Centre.
The Centre stuck to its decision that the area was reserved for PSUs.
Six of the nine companies then challenged the government’s decision in the Jharkhand High Court.
However, in 2009, the high court upheld the government’s decision and rejected their appeals. The State is not only the owner of all mines and minerals but had the inherent right to reserve any area for the use of PSUs alone, it ruled.
The companies then moved the Supreme Court, challenging the high court order claiming the Centre could not withdraw assurances given by the state. They also sought to know from the top court whether a government could reserve mining rights in a particular region for PSUs only and whether leases granted to private companies could be withdrawn by a successive government.
On Thursday, a two-judge panel of the Supreme Court, comprising Justice RM Lodha and Justice HL Gokhale, upheld the high court order and the Centre’s decision.
“We are waiting to see the order and will abide by the ruling,” Manoj Agarwal, managing director of Adhunik Metaliks, told Clean Media. He pointed out, however, that Adhunik Metaliks does not have any holding in Adhunik Alloys.
Neetal Narang, a spokeswoman for Monnet Ispat, did not respond to two calls on her mobile phone.
The company’s managing director Sandeep Jajodia, too, could not be reached for a comment. R Jayaraman, spokesman at JSW Group, couldn’t immediately comment on the order.
The decision was a big blow for private miners, said analysts.
“It appears to be an order that could affect the sentiments of the private metal companies,” said Jatin Y Damania, an analyst at SBI Capital Markets. Damania said he is awaiting details of the court ruling to assess the impact.
SC throws out steel companies Jharkhand mining plea
New Delhi, July 27 (CMC) Six steel makers were in for a huge jolt on Thursday after the Supreme Court dismissed their lawsuits challenging the Centre’s decision to reserve at least 6,400 acre iron ore bearing area in Ghatkuri in Jharkhand for excavation by public sector undertakings, or PSUs.
The companies include listed players Monnet Ispat & Energy and Ispat Industries (now JSW Ispat Steel).
Monnet Ispat shares fell over 15% on the news, on BSE. Shares of JSW Ispat, however, recouped losses to close up nearly 2%.
The other companies are Adhunik Alloys and Power, Prakash Ispat, Jharkhand Ispat and Abhijeet Infrastructure.
As per the facts of the case, the Union government had in 1969 reserved the 2,590 hectare (6,400 acre) patch — estimated to contain as much as 600 mt iron ore reserves --- for mining exclusively by PSUs.
However, in 2006, the Shibu Soren-led Jharkhand government assured nine companies — bypassing five PSUs which were among around 150 applicants — that they could undertake mining in the area and sent its recommendation to the Centre.
The Centre stuck to its decision that the area was reserved for PSUs.
Six of the nine companies then challenged the government’s decision in the Jharkhand High Court.
However, in 2009, the high court upheld the government’s decision and rejected their appeals. The State is not only the owner of all mines and minerals but had the inherent right to reserve any area for the use of PSUs alone, it ruled.
The companies then moved the Supreme Court, challenging the high court order claiming the Centre could not withdraw assurances given by the state. They also sought to know from the top court whether a government could reserve mining rights in a particular region for PSUs only and whether leases granted to private companies could be withdrawn by a successive government.
On Thursday, a two-judge panel of the Supreme Court, comprising Justice RM Lodha and Justice HL Gokhale, upheld the high court order and the Centre’s decision.
“We are waiting to see the order and will abide by the ruling,” Manoj Agarwal, managing director of Adhunik Metaliks, told Clean Media. He pointed out, however, that Adhunik Metaliks does not have any holding in Adhunik Alloys.
Neetal Narang, a spokeswoman for Monnet Ispat, did not respond to two calls on her mobile phone.
The company’s managing director Sandeep Jajodia, too, could not be reached for a comment. R Jayaraman, spokesman at JSW Group, couldn’t immediately comment on the order.
The decision was a big blow for private miners, said analysts.
“It appears to be an order that could affect the sentiments of the private metal companies,” said Jatin Y Damania, an analyst at SBI Capital Markets. Damania said he is awaiting details of the court ruling to assess the impact.
SC has rightly shown the door to the companies..
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