THE CENTRE is making an effort to persuade the Karnataka government to extend the lease agreement of the Kudermukh Iron Ore Company, a 100 per cent export-oriented public sector undertaking of the steel ministry. The state government had given the company a work permit for only one year in 1999 when its 30-year lease period expired last year. According to B K Tripathy, the Union steel minister, "The Centre was vigorously pursuing the lease extension matter with the Karnataka government." This was stated in an official statement released by the ministry on Wednesday.
In the absence of a 20-year mining lease, KIOCL had held up many of its major capital and expansion projects, Tripathy said. The minister clarified that as stipulated by the state government, the study on environment impact assessment and impact of mining on flora and fauna in the region was in progress and reports were awaited shortly. The state had agreed in-principle to exclude the entire lease area from the Kudremukh National Park and extend the lease, he said adding he had requested the state government to expedite the notification of the park. The minister also added that SAIL was expected to reduce its losses significantly this year following the financial restructuring in the company. Vizag steel plant made a profit of Rs 28.54 crore during the first half of the current financial year.