The Industrial Development Corporation of Orissa told the Supreme Court that if Jindal Stainless be given licence to develop the Tangarpada chromite mines in the state, it will make a super profit. It added that the decision of the state government for a JV with Orissa Mining Corporation for the development of the mines is in best interest of the state.

Mr PP Rao counsel of IDCOL said that "There is a huge gap between our expectation and Jindal’s quotation. So, there is no question of negotiation with them. If JSL be given licence to develop the mine, it will make a super profit."

He said that the quote of Jindal’s licence fee was much below the market value. The present market value rose to about INR 4,000 to INR 8,000 per tonne of ore. However, Jindal had submitted its quote of INR 900 per tonne of ore irrespective of grade. He added that "This quote and present market value is unbreachable."

On behalf of JSL former solicitor general Mr TR Andhyarujina said that "The question is whether IDCOL can enter into a JV with an outsider, OMC, in breach of the apex court order. The court in February 2008 had asked for inviting of fresh financial bids from TATA Steel, JSL and Visa Steel to develop the Tangarpada mines in Dhenkanal district of state. IDCOL had rejected the bids and instead decided to develop the mines on its own. The state government on September 27, 2008 went a step further and, acting on IDCOL report, decided to have a JV with OMC. They cannot bring in an alien for JV."

He added that "Secondly, if IDCOL feels that our quotation is low, why it did not negotiate with the company. No negotiation was made on such issue."

Justice Mr P Sathasivam heading the two judge bench said that "We have to consider whether a direction could be issued to negotiate with JSL for development of such mines."

IDCOL had floated tenders from private parties for setting up a JV to develop the Tangarpada chromite mines in the state. However, government’s decision to pick JSL as the partner for the project left it in litigation which ultimately reached the apex court.

Taking a U turn, Naveen Patnaik led government decided to cancel the tender of private parties for the development of Tangarpada mine taking the plea that it was in the best interest of the state.

(Sourced from Economic Times)