Odisha will not allow commercial sale of ore from captive mines , a provision introduced by the Centre in its recent amendment to mining laws to increase the supply of ore in the market.
The state government feels there is a contradiction between the recently amended mining act which allows captive lessees to sell up to 50 per cent of their ore in the open market, at an added cost, and auction rules that require them to meet a minimum target under the Mine Development cum Production Agreement (MDPA) they have with the state.
On Friday, Odisha’s Principal Secretary, Steel and Mines, Surendra Kumar wrote to state Director of Mines that, except for few, most lessees who had won rights through competitive bidding were falling short of their production and dispatch targets.
Considering that a failure to meet the MDPA makes them liable to pay penalties, any “permission allowing to sell 25% of previous year’s production by a captive mining lessee appears to be incorrect and illogical,” says the letter. It isn’t yet 12 months since these lease deeds were signed; the period in which the MDPA is to be met. “A captive lessee may have signed a lease in February 2021. This does not imply that he can be allowed to sell 25% of production in April 2021. That would be inappropriate in the eyes of law,” says Kumar, preventing any such sale for now.
Earlier this month, Director Mines, Debidutta Biswal had written to his colleagues to immediately suspend transit permits for despatch of all merchant sale of dump fines, slimes as well as of ore upto 25% of the previous year’s production of Steel Authority of India. He added that normal despatches to the PSU’s plants must not be affected.
Quoting the Principle Secretary’s letter on Friday, Mr Biswal asked his deputies to ensure that no permission is granted to post auction captive mines for commercial sale of ore (up to 25 per cent of their production of the previous financial year). If any such permission has been accorded already it is to be withdrawn, if any merchant sale has been made it is to be treated as despatch towards meeting the MDPA target, says his letter.
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