The Centre and Orissa government find themselves on a war footing as the Centre holds the state responsible for stepping on its toes by determining royalty rates of iron ore. Acknowledging complaints from steel producers that the state is executing a royalty regime which is in contravention to the Mineral Concession Rules (MCR), the mines ministry has demanded an immediate clarification from the state and directed it to expressly abolish the system.

The government of Chhattisgarh has taken the Centre to court for allegedly infringing upon the state’s mining rights through a provision in the Mineral Concession Rules, 1960. In a writ petition filed last week, the state asked Delhi High Court to declare Rule 55 (4) of the Mineral Concession Rules (MCR) as “unconstitutional and ultra vires” of the Mines and Minerals (Development & Regulation) Act, 1957, as it gave draconian powers to the Centre to bypass states.

‘Company exported iron ore mined in locations other than those allotted to it'
The Obulapuram Mining Company of former Karnataka Minister Gali Janardhan Reddy mined iron ore illegally from several locations, including immediate neighbours in Karnataka.

The High Court on Friday rejected the Government plea to vacate the stay on sand mining licence, but asked it to allocate by way of auction as per mining rules.

Hearing a petition by the State, the division bench headed by Justice Gopala Gowda directed the Government to abide by the rules as per 21 (2) B of Karnataka Minerals Concession rules.