The Centre has declined to reserve seven iron ore blocks in favour of Jharkhand government PSU and advised the state government to auction these areas instead.
These seven iron ore deposits in West Singhbhum district were previously held by private companies whose leases lapsed on March 31, 2020. In August last year, the state cabinet decided to reserve these areas, with reserves totalling to 230 million tonnes of iron ore, in favour Jharkhand State Mineral Development Corporation (JSMDC).
The union mines ministry, whose approval the state needs for any such reservation, responded to the state’s request on Feb 2 by asking Hemant Soren’s government to notify the areas for auction instead. “Reservation of blocks for Government companies may be taken up only in cases where subsequent to auction the successful bidder fails to execute the Mining Lease or after the execution of Mining Lease the lease holder fails to start production as prescribed,” says the letter.
It is unclear how soon these deposits could come to the market. Soren leads a coalition government, with Congress as a partner, that rules the eastern with huge mineral potential, where currently Steel Authority of India Limited (SAIL) and Tata Steel hold 70 per cent of (non-coal) alloted areas.
It is pertinent to point out that the mining reforms recently approved by the union Cabinet, include a provision under which auctioned mineral bearing areas that have failed to come into production may be allocated to public enterprises. An example of this is the Guali and Jilling- Langalota blocks in Odisha that have been handed over to Odisha Mining Corporation for 10 years. This stop-gap measure was necessitated by the shortage of affordable ore after the auction of more 20 operating iron ore mines in Odisha that continue to struggle to meet expected iron ore production.
To reserve or not to reserve
Opposing the state’s move to reserve the seven blocks, BJP leaders in Jharkhand writing union mines minister, Prahlad Joshi, had accused JSMDC of being incompetent and squatting on areas. The move to reserve the blocks in its favour, they had complained, would be a violation of the National Minerals Policy (of 2019 and would amount to a loss of Rs 40,000 crore that may have accrued as premiums had the areas been auctioned.
However, the recent mining reforms also provide for revoking areas lying unworked with state PSUs. SteelMint has learnt that the Jharkhand government has moved to take back such areas lying with the Central government steelmaker, SAIL.
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