JSW Steel has just bagged four new mines in Odisha with more than a billion tonnes of iron ore reserves. It has appetite for more. Its commitment to pay as high as Rs 132 to the state for every Rs 100 of ore produced has, however, set new benchmarks, raising questions about the viability of auctions. JSW Group, Chairman, Sajjan Jindal tells Meera Mohanty in an interview that JSW Steel can not only afford these premiums, but having control of the raw material also changes everything for the company. And should for the state of Odisha too. Edited excerpts:
Please explain how you are going to make money paying the state more than the sale value…
It’s not about the economics. There is a paradigm shift, a structural change that JSW is driving in the country.
People argue that mineral licences are not auctioned in Brazil, Australia and Canada, so why should it be different in India?
Because there is a huge demand and when there is such an excessive demand for a limited resource, it should be allotted transparently. All earlier practices of a quota system, some government committee, first-come-first serve, were opaque and based on discretion. I had been arguing that anything which is under the earth belongs to the people of the country, not any one individual person, and we must have a more transparent system where all the money goes to the government and can spend on welfare of the people.
Fortunately, this was understood by Prime Minister Narendra Modi and he turned this into a reality in 2014 (with an amendment to the mining law). And I now feel vindicated with these premiums of 120 per cent, 130 per cent, 140 per cent.