More than a year after it last auctioned a mineral deposit, India’s main iron ore-producing state, Odisha, is ready for the next round.
Eight iron ore mines, three limestone, two graphite and one manganese will be open for bids soon, according to sources. This time, the state is offering mostly virgin areas. The list does include Kasia, a mine that was being operated by Essel Mining, whose geological report is being reviewed.
Two of the deposits – Unchabali and the manganese deposit, Kalimati – will be auctioned with “embedded clearances”, a controversial concept where the state procures environmental and other clearances before it auctions the mine. Operating mines in the past were auctioned with past clearances extended for two years to the new lessee. In the case of other greenfield areas, the new lessee will have to secure all statutory clearances.
Essel Mining’s Koira mine will also lapse in August this year, as will Sarda Mines’ rights over the Thakurani B deposit. Officials in the state government told SteelMint that Koira, which produced 6 million tonnes (mn t) annually, will be in the market as soon as its geological reserves are verified. However, Thakurani B, a mine that many have their eyes on for its large area, infrastructure and high-grade ore, may take longer. The current lessee, Sarda Mines, is expected to contest the government’s decision to consider the lease valid till 13 Aug’21.
In Mar’20, 19 iron ore mines were auctioned which produced nearly 71 mn t in FY’20. The Centre and state could not prevent an iron ore shortage despite a transfer of permits from old to new lessees who also had to meet 80% of the average of the mine’s past two years’ production.
While bottlenecks were being ironed out, the pandemic got worse, further delaying the next set of auctions. Since then, the Centre has made fresh amendments to the MMDR Act and is tweaking rules to fix the ambiguities that cropped up last time. There is greater clarity on the upfront dues, liabilities and lapsing in case a successful bidder does not end up signing a lease. Before these auctions take place, miners also expect to be allowed greater flexibility in meeting targets under the Mine Development and Production Agreement.
A failure to meet this limit in three consecutive quarters could lead to an automatic lapsing of the lease. The state is believed to have urged the Centre to allow lessees to make up for this shortfall in the fourth quarter, failing which the lease can lapse in the fifth quarter.
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