Kolkata February 16, 2013 http://www.business-standard.com/article/companies/bugged-by-lease-delay-aussie-miner-irl-mulls-exit-from-india-113021600524_1.html
Bugged by lease delay, Aussie miner IRL mulls exit from India As last resort, to file case in Rajasthan High Court
Frustrated with the inordinate delay in getting mining lease for projects worth $200 million, India-focused Australian miner India Resources Limited (IRL) is planning to call it quits.
“I am exhausted now and there is extreme pressure from the shareholders back in Australia. We applied for the leases in 2008, but we are still to get the nod from the coal ministry,” Arvind Misra, managing director of IRL, told Business Standard.
Misra said the future is very uncertain and IRL’s chairman can “call anytime from Australia” to put an end to the India story.
“The government should get its act together. There is huge potential in the Indian mining sector and we are ready to invest as well, but we can not continue to face losses due to mining lease delay,” he added.
The company has served notices to the authorities concerned against the delay in issuing mining leases. The deadline of the notice will expire in around a week.
As a last-ditch effort, however, the company will move the Rajasthan High Court against the state government for the delay. The Perth-based miner had applied for mining lease in 2008 to start operations in the Aravali Range.
“We will go to Supreme Court if needed,” said Misra.
For the past few years, IRL has been carrying out mining operations in India for coal and non-ferrous metals. Being one of the leading foreign contract miners to operate in India, IRL had restarted the Hindustan Copper's Surda mines in Jharkhand in 2007. It was also the lowest bidder to operate Hindustan Copper’s Rakha copper mines in Jharkhand.
IRL which was the lowest bidder to operate Hindustan Copper’s Rakha copper mines in Jharkhand, is now hoping to start work after all pending legal issues are resolved. Crown Mining, a wholly-owned subsidiary of IRL, has spent $1.5 million to explore for base metals such as lead and zinc. It, too, is awaiting mining lease for the last four years.
India has attracted several foreign mining companies such as Australia’s Thiess and Polish mining major Kopex. However, according to experts, procedural delays such as the one being witnessed in IRL’s case, may have dented the country's reputation.
IRL had also signed up six sponge iron makers in West Bengal in January 2010 for a contract mining project of Bankura DRI Mining Manufacturers Company, a special purpose vehicle to mine the Biharinath coal block in the Raniganj coalfields.Work, however, could not begin as the company is yet to get the mining lease.
IRL Price at posting:
0.3¢ Sentiment: None Disclosure: Held
