OMDC expects environment ministry nod to key mine in May

Orissa Minerals Development Company (OMDC), a Kolkata-based mining company under the Ministry of Steel, is expecting environmental clearance for its Kolha-Roida mine by the end of May.

The go-ahead from the Ministry of Environment and Forests could give a much needed fillip to the company. OMDC’s six mines are currently non-operational due to lack of clearance from the green body and expiry of mining leases due to the same reason.

The company, which is an indirect subsidiary of Rashtriya Ispat Nigam Ltd (RINL), currently has 206 million tonne of iron ore reserves and 44 million tonne of manganese ore reserves in Orissa, spread across the six mines.

“The company is expecting clearance from the environment ministry by the end of May and then mining operations could be started. By the time the clearance comes, the contractors for Kolha-Roida will also be finalised and mining could begin at the earliest,” said a source close to the company.

The source said OMDC is also expecting clearance for the Bhadrasai mine soon after the nod for Kolha-Roida is obtained.

“This is of course a very positive development as Bhadrasai is one of the biggest mines under the company’s belt and there were no signs of any movement on that front,” said an analyst in a portfolio management services.

He said this could expedite further development of its mines, because once it receives clearance for Bhadrasai, the company is likely to look for contractors.

In January this year, OMDC had invited bids from prospective contractors to mine and transport iron ore from the Kolha-Roida mine, which is one of the biggest mines under the company’s portfolio.

The mine is spread across an area of 255 Ha and is rich in iron ore reserves with some reserves of manganese ore too.
While a nod from the ministry gives some clarity on the spate of its non-operational mines, analysts are wary of the company.

“A nod from the ministry was long overdue and will definitely be good for OMDC. But considering the operational challenges the company faced in the past, unless operation finally begins, not much should be read into it,” said a banker, who has been tracking the company’s stock price for some time.

The company had been in a legal battle with its previous contractor for non-performance and delivery on the set targets for the Kolha-Roida mine. While the outcome of the case is still unknown, analysts say since the company has initiated the tendering process, there are chances that the legal battle is over.
While the company had not yet finalised a contractor for the mine, sources have said that few big corporates have shown interest to mine and transport iron ore from the Kolha-Roida reserves.

“Companies such as Sesa Goa, Ramky Infra, Gulf Oil, Adhunik Metaliks among others have shown interest,” a source had told DNA in March.