The ongoing tussle between the Union mines ministry and the Odisha government has thrown a spanner in the conduct of mineral block auctions in the state.
The spat relates to the maximum lease area a miner can hold to participate in auctions. The Mineral Auction Rules of 2015 have clearly spelt out that any lessee which has 10 square km or more area in its leasehold automatically disqualifies from bidding.
To overcome this restraining clause, the state government had shot off a letter to the Centre to relax the ceiling on mineral lease limits to 75 sq km. The state government then went ahead with auctions of two virgin iron ore blocks- Chandiposhi and Purheibahal, both in Sundargarh district. But a public interest litigation (PIL), purportedly backed by JSW Steel was filed in the Delhi High Court in May 2018 to challenge the participation of Tata Steel in the auctions despite the fact that the steel monolith already held over 50 sq km of lease area inside Odisha. The court had asked the Odisha government to suspend the process of auctions till clarity emerged on the eligibility criteria of auctions.
But the Odisha government received a setback recently when the Centre disallowed the proposal to hike mineral lease area limits.
“Disallow participation of persons who are holding or may hold in the event of becoming highest bidders in the auction, hold the area in excess of the area limit under Section 6 (1) of the MMDR Act. It may, however, be noted that the area limit would be governed as per the provisions under Section 6 (1) of the MMDR Act”, Veena Kumari Dermal, director (mines), Union mines ministry wrote to the Odisha steel & mines department.
In its reply, the Odisha government said the state government had constituted a committee chaired by RK Sharma, additional chief secretary (steel & mines) to consider the case for revising area limits of a mine lessee. Backing its justification behind the demand to increase limits, the state government cited the example of Steel Authority of India Ltd (SAIL), a central public sector enterprise (CPSE) which is holding an area of 55.01 sq km in mining leases of iron ore and associated minerals in Odisha. Besides this, the central government has reserved an area of 2.77 sq km for exploration and exploitation through SAIL in 2004 by invoking the provisions of Section 17A-1A of the erstwhile Mines and Minerals- Development & Regulation (MMDR) Act of 1957.
“The state government after consideration of the recommendations of the committee have decided to request the Government of India to enhance the area limits for mining leases in the state of Odisha to 58 sq km for iron ore and associated minerals in exercise of powers conferred under provisions to Section 6 (1) (b) of MMDR Act in the development of mineral and industry.
The lack of a consensus between the Centre and the state has stifled auctions of mineral blocks. No virgin block could be auctioned in Odisha last fiscal due to pending litigations and the cloud surrounding the Auction Rules and eligibility norms. This fiscal too, the auctions of mineral blocks have failed to resume even though 10 blocks are ready for online bids.
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