Ranchi, Sept. 16: The state government today indicated it would not accept Tata Steel’s demand of fresh mining leases as a pre-condition to going ahead with its proposed 12MTPA steel plant at Tontoposhi in Jamshedpur as per a 2005 MoU. Reacting to the steel behemoth’s threat to dump the plan if fresh leases weren’t allotted, a senior official close to the chief minister questioned the company’s need for new mines even before setting up the proposed plant. “Why should they need the mines now? We do not want a company to sit over a mine for a long time,” he said, but added that the state government would only grant leases to those companies that were prompt in adding value to the available ore. The Telegraph reported today that Tata Steel had threatened to abandon its investment plan of Rs 40,000 crore at Tontoposhi if the state government did not act on its application of fresh mining leases. In fact, state industry secretary A.P. Singh had confirmed the development that could not have come at a worse time for Jharkhand, which is desperately trying to shore up its flagging image as an investment destination. “Tata Steel representatives informed us that they would not go ahead with the proposed investment of over Rs 40,000 crore in a project at Tontoposhi in Jamshedpur,” he told The Telegraph yesterday after an industry review meeting chaired by chief secretary S.K. Choudhary. Surprisingly, Tata Steel today denied it held out a threat to the state government. “We have simply requested the state government to provide us with more iron ore reserves for our greenfield project,” the company sought to clarify in an email to this paper. The Telegraph, however, stands by its story. Tata Steel, which had signed an MoU for the greenfield project in 2005, is learnt to have downsized its earlier demands from 25,000 acre to about 4,000-5,000 acre. It had identified Tontoposhi in Jamshedpur near neighbouring Seraikela-Kharsawan district for its proposed plant. But so far, there has been no progress on the project. In a conciliatory gesture today, the state government said it would help the company acquire land for its proposed project if it applied afresh. “The state is ready to acquire land for the steel major provided it forwards a fresh application,” said Singh. However, the land would come at a premium as the state would follow the voluntary land acquisition rules framed in 2010 in concurrence with the Centre’s Land Acquisition Act. “Tata Steel or any other company for that matter will have to pay about 2.5 times of the original land costs, a mandatory condition under the voluntary land acquisition rules,” he told The Telegraph. “Moreover the state will only acquire land for which consent of raiyats and respective gram sabhas has been obtained,” he added. The chief secretary held a review meeting today to study the progress of 11 MoUs signed by various companies. Of them, five companies — Jamuna Auto Pvt Ltd, Seraikela-Kharsawan; Bramhaputra Metalics Ltd, Ramgarh; Bokaro JP Cement, Bokaro; Tata Blue Scope, East Singhbhum; and Metalsa, East Singhbhum — have already begun production. Their representatives were called to discuss problems, if any, in running the new factories. The other six firms that had signed MoUs on March 17 — AVI Hospitality, Mumbai; Amrapali Golf Homes Pvt ltd, Noida; Amrapali Homes Projects, Noida; CHI Ltd, Delhi; Matushri Industry, Mumbai; and Videocon Industries, Mumbai — were told to locate land for setting up their units.