Odisha-based mining contractor Mythri Infra has moved a petition in the High Court that could delay the auction of the Karlapat mines, the first bauxite deposit to be auctioned in the state.
According to sources,Vedanta, Anrak Aluminium, and steelmaker Jindal Steel and Power Ltd and Jagannath Universal (which shares directors with Sarda Mines)have placed bids. Mythri,while failing to submit an online bid,had tendered a physical one,while Aditya Birla’s aluminum companies have chosen not to participate.
Bauxite mines have always been controversial for the Naveen Patnaik government that got particularly bad press for trying to push mining at the Niyamgiri hilltop to feed Vedanta’s alumina refinery in Lanjigarh in the southern Odisha district of Kalahandi.
The auction of Karlapat is being met with resistance from the most unexpected quarters though — from Anil Agarwal’s bauxite-strapped Vedanta. Despite its long wait for captive raw material, last month the company wrote to the Director of Mines seeking a deferment of the auction.
In the letter sent on 17 Aug’21, the company’s head of Odisha mines, Amit Jain, expressed concern over the yet-to-be-notified Eco-Sensitive Zone (ESZ) of the Karlapat Wildlife Sanctuary, at a distance of 1.5 km from the proposed mine. As per the Ministry of Environment, Forest and Climate Change(MoEF&CC) notification of 31 Jul’13, the default buffer zone for areas whose ESZ has not been delineated is to be 10 km.
The final notification awaits MoEF&CC approval, said, senior state officials. The state’s draft proposal, seen by SteelMint, recommends an ESZ of zero to 10 km. The rationale for making the southern boundary of the protected area coterminous was the presence of bauxite which the state’s Odisha Mineral Exploration Corporation Ltd (OMECL) had been tasked to explore. Officials speaking on condition of anonymity pointed to the Chandaka-Dampara Wildlife Sanctuary whose ESZ is also zero where the sanctuary meets the capital city of Bhubaneswar.
Vedanta’s letter, however, raises the more pressing matter of the average sale price (ASP) that will decide how much the successful bidder pays in premium as well as in royalty and other mineral taxes. “We would also like to inform you that the Ministry of Mines, GoI has formed a committee, vide Office Memorandum dated 6 Apr’21, to examine and rectify various issues in the ASP determined as per the Minerals (Other than Atomic and Hydrocarbons Energy Minerals) Concession Rules, 2016 and the stakeholder consultation is also completed for the same,” said the letter. Similar presentations were also made by FICCI, Aluminium Association of India and Mythri Infra.
Odisha’s attempts at exploiting its eastern ghat bauxite deposits in the past, have met with fierce resistance from the local population culminating in the Supreme Court’s landmark Niyamgiri judgment. The state government, however, seems to have had relatively better success at pushing bauxite and aluminum projects in the recent past. Odisha Mining Corporation, which once dismissed its bauxite claims, including to Karlapat, choosing to focus instead on the more lucrative iron ore, now proposes to double production from 3 mntpa to 6 mntpa at Kodingamali. Mythri Infra is a contractor at this mine developed only a few years ago.
Kodingamali’s ore should have come as a big relief to Vedanta’s operations at Lanjigarh if it wasn’t for the high base price (set at INR 2,011/tonne (t) for ore auctioned in Mar’21). Vedanta has challenged this in the court and has been picking up ore at INR 1,000/t under a High Court order and against a bond until the case is finally decided. Industry sources expect the pricing mechanism to be arrived at soon, hopefully before the auction.
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