OMC unwilling to revive JV with Rio Tinto

The $2 billion and 17-year-old joint venture between Orissa Mining Corporation (OMC) and Anglo-Australian mining major Rio Tinto is now almost a lost cause with OMC indicating that it is no longer interested in reviving the deal

The $2 billion and 17-year-old joint venture between Orissa Mining Corporation (OMC) and Anglo-Australian mining major Rio Tinto is now almost a lost cause with OMC indicating that it is no longer interested in reviving the deal.

Incidentally,the decision came even as the state government was in the process of finalising the joint venture agreement and collaborative agreement with the company.

Saswat Mishra,chairman and managing director,OMC said the JV pact with Rio Tinto is now null and void and the company is no longer willing to revive the project.

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State officials said the company and the OMC did not agree on the new guidelines insisting that the JV should not be an export-based project. The law department which review the draft agreement had observed that the export clause in the earlier agreement needs to be redrafted keeping in view the government orders relating to export of iron ore by the new joint venture company and the policy of value addition being followed by the state.

Rio Tinto had entered into a JV with OMC on February 24,1995 to develop Gandhamardhan and Malangtoli iron ore deposits in Keonjhar and Sundergarh in Orissa. Five years later,another agreement was signed with National Mineral Development Corporation as it was the leaseholder of the two mines. As differences cropped up between OMC and Rio Tinto over export,OMC had filed a case in Orissa High Court in 2003 to wind up the JV agreement.