In 1986 the State Government reserved certain areas in the State district of Bolangir, Sambalpur and Kalahandi by notifications for exploitation by the Public Sector (OMC) under the then Rule 58 of the Mineral Concession Rules, 1960 (deleted from M.C. Rules, 1960 by an amendment in the 13th April 1988. Subsequently several Notifications were issued under Rule 75 (2) during 1988 and thereafter appointing (OMC) as an agent of the State Government to operate in these areas. OMC was also authorised to form joint sector Companies and hold 51% share therein. The Notification issued during 1988 further stipulate that Orissa Mining Corporation would sell gemstone to Joint Sector Companies with a view to ensuring an uninterrupted supply of gemstone to lapidary units in the State. The Gemstone Corporation of Orissa Ltd. (GEMCO) was formed on the 4th January 1989 and OMC was authorised to open purchase centres to procure gemstone from the local people in order to check smuggling. Royalty was assessed on the purchase price paid by OMC, PL/ML for gemstone was granted to OMC alone in the areas reserved for the purpose. In 1991 exploration scheme was launched with UNDP assistance to identify and assess the availability of gem bearing area.
