Kickback charges on bauxite deal with Jindals denied

Kickback charges on bauxite deal with Jindals denied

The Hindu Business Line

July 15 2005

Hyderabad - Refuting the allegations of Opposition parties, the Andhra Pradesh State Mines & Geology Minister, Ms P. Sabita Indra Reddy, has denied kickbacks to the Chief Minister in offering bauxite-mining facilities to the O.P. Jindal Group-owned Jindal South West Steel (JSW).

She termed the allegations of Opposition parties, especially Telugu Desam, as 'baseless' with regard to the MoU signed with JSW for the Rs 9,500-crore aluminium plant in Visakhapatnam.

As the area with bauxite reserves in the State came under the notified tribal zone, it could be leased out only in favour of tribals or State-owned enterprises as per Supreme Court directives.

Accordingly, the AP Government had decided to offer lease rights to the AP Mineral Development Corporation (APMDC) and sell the bauxite to the aluminium companies.

The Minister said the Government initially planned to offer the bauxite mining rights to the State-owned National Aluminium Company (Nalco).

However, since Nalco had enough reserves of bauxite, the Government negotiated with Jindals. The APMDC would supply the required bauxite to JSW's proposed aluminium plant at Visakhapatnam as per the MoU signed with Jindals.

The Government would strive to ensure basic amenities to the tribals in the bauxite mining area in the form of schools, hospitals and other social infrastructure even before the JSW project takes off in the area, the Minister said.

The JSW project would offer employment to 3,000 directly and over 10,000 indirectly. Of this, a majority of jobs would be offered to the local tribals.

Further, in terms of the current regulations, nearly 40 per cent of the royalty received from bauxite mining would be spent on tribal development initiatives, she said.