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On June, 3, 1993, the Central Government authorised the renewal of the lease over the entire area of 1261.476 hectares. However, before the formal lease could be executed, the Union Minister of State for Steel & Mines, acting on a complaint filed by Shri G.C. Munda, Member of Parliament, directed that the matter be kept in abeyance. On September 27, 1993, the said Union Minister wrote a letter to the Chief Minister of Orissa stating that the lease urea of TISCO should be reduced by half and the balance should be distributed in an equitable manner taking in to consideration the need to genuine consumers for captive consumption.

For the foregoing reasons, the Committee was of the view that the concept of "mineral development" under Section 8(3) of the Act requires the assessment of the captive mining requirement of different industries as also the application of the principle of equitable distribution of mining leases.

The learned counsel for T1SCO sought to assail this approach of the Committee. He began by pointing out that before the Rao Committee, the State of Orissa had canvassed the view that the concept of an industry linked to captive mining is not envisaged by the scheme of the Act, nor has it been accepted as a mailer of policy. This was for the reason that there are more -industries than mines and. if every industry was entitled to a mine, more industries would be starved rather than served and such a policy would not be feasible. He further submitted that ever, the Rao Report had not given its enthusiastic approval to the concept of captive mining and assuming that it had. its effect would be negative by the fact that this Court had in the Indian Metals case expressly rejected the theory of captive mining. Learned counsel further submitted that the concept of captive mining has been wrongly applied since no mining activity can be carried out only for captive consumption. Different industries require varied grades of ore for their activities and a single mining area cannot produce a. particular type of are required by one industry alone. Consequently, he submitted that such a condition would lead to ineffective exploitation of the ore. TISCO's counsel further submitted that none of the other parties who were before this Court to stake their claim for mining teases, had any industry of their own where the chromite ore could be used for manufacturing purposes and, therefore, they were not in a position to use it for captive consumption. Hence, he submitted, the argument of captive consumption was wholly misplaced. He further contended that the Committee had erred in applying the principle of equitable distribution of mining leases; according to him the correct principle is that of equitable distribution of minerals and not of mining teases.

We have studied the Committee's report on this issue and we find that most, if not all, of these contentions have been dealt with in the report. We find it difficult So accept she contention that the Rao Committee had not endorsed the concept of captive mining because, as we have already mentioned, it does in fact do so. Having studied the decision in the Indian Metals case, we find that on the issue of the requirement of captive mining, this Court had expressly refrained from giving an opinion on the issue as it did not arise for its consideration; however, it did recommend that chromite ore be supplied to needy applicants in an equitable manner. It must be pointed out that nowhere in the Rao Report not in the report of the Committee, has the requirement of captive mining been interpreted to mean that every. industry within the State would, by reason of its existence, be entitled to a mining .lease. The captive requirement of an industry is a factor that has to be kept in mind while granting leases but, it is to be done on a comparative scale. While the Central government exercises its discre-tion in granting or renewing a lease, it is clear that the capacity of an industry to effectively exploit the ore, will be a predominant consideration. The submission of the learned counsel that none .of the other parties before this Court required the mineral ore for captive consumption cannot be accepted. This aspect has been specifically examined by the Committee at pages 260-263 of its report. In order to properly appreciate the issue of captive "consumption, the Committee examined the needs of the other parties before it. It stated that each of these parties had manufacturing .industries which produce value-added products and earn considerable foreign exchange for the country, and it was therefore of the view that an analysis of their total requirement was necessary in the interests of mineral development as also that of the nation. Based on the information supplied to it, the Committee thereafter made an assessment, for a total period of 50 years, of the captive and net requirements of ICCL, IMFA, FACOR and JSL. At page 349 of its report, the Committee has also taken note of the projected captive and net requirements of Ispat Alloys. This being a finding of fact that has been recorded by the Committee, we have to accept that the argument of captive consumption does have a basis in the facts of the present case. On the issue of the application of the principle of equitable distribution, we are of She view that the Committee had, after having taken note of the prevailing situation and the problems faced by needy manufacturers, taken the correct view in recommending its implementation.