India: Amendment in Mining Law; SAIL, OMC Mines to be affected

Bhubaneswar:  The cancellation of 6 non Iron ore mining leases in Odisha has made the Iron ore miners jittery, as many fear the government may cancel some Iron ore mining leases in the next phase.

Recently, the government of Odisha has issued orders to stop mining at 6 non Iron ore mines including Chrome mine of B C Mohanty and Limestone mines of Tata, ACC Cement and BSL. The state government has issued these orders on the basis of amendment in the Mineral Concession Rules (MCR 1960) incorporated by the union mines ministry on 18 Jul, 2014. As per the amendment (link attached), no mining lease will be renewed after the expiry of 2^nd renewal term or 40 years of operation; which comes first. The amendment has done in line of the Supreme Court order on 2^nd renewal earlier this year.

According to an official in Odisha Steel & Mines department, the state government is waiting for the Supreme Court order on illegal mining in the state and after it, proper steps will be taken on Iron ore mines also, which are running under 2^nd renewal.

However, if this happens, several high profile mines including mines of OMC and SAIL may get closure notices. OMC’s Khandabandh (1963), Sankradih (1959), Gandhamardan (1963), Daitary (1966) and Banspani (1968) have already completed 40 years of operation. Similarly, SAIL’s Kalta Iron ore mines has been in operation since 1960 and Bolani since 1962.

On the other hand, Arjun Ladha mines operating since 1966, M S Dev mines operating since 1959, Essel mining’s Kasia mines (1955) and BCMG’s Thakurani mines (1962) come into this list.

More than 50 Iron ore, Manganese, Graphite, Dolomite, Limestone and Chromite mines operating in the state have already completed their 2^nd renewal period or 40 years of operation. Additional 20 mines will come to this category by the end of 2014. Similarly by 2020, another 60 mines will complete their 2^nd renewal period or 40 years of operation. Closure of so many mines could intensify Iron ore scarcity in the state. So, challenges ahead for the mining and metal industry.

For more details click the below link:
http://www.steelmint.com/fileForMail/mines_ministry.pdf