Odisha Mine Auction 2020 – Govt Likely to Float Auction Documents in July-August

SteelMint in conversation with officials from Directorate of Mines (Govt of Odisha) learned that the tender document for grant of iron ore mines in Odisha that are expiring on 31st Mar’20 are likely to be be floated in July-Aug’19. As per sources, a preliminary meeting was held last week in which govt has asked MSTC to prepare the NIT’s and fasten the process.

Towards early Apr’19, SteelMint reported that all the merchant iron ore mining leases in Odisha which were due to expire in Mar’2020 had submitted the G2 level exploration report. And reports were forwarded to SBI Capital – the investment banking arm of state-run lender SBI — as transaction advisor and MSTC as an e-auction services provider for the upcoming mines auction.

Among the conditions laid down by govt. for auctioning of mining leases, one factor was that leases have to be explored up to the G2 level as demanded by Mineral Auction Rules of 2015 and data on residual mineral deposits have to be compiled by the leases. Two central government agencies- Geological Survey of India (GSI) and Mineral Exploration Corporation of India (MECL) were tasked with mineral exploratory work.

What is G2 level of exploration?

G2-level exploration’s objective is to establish the main geological features of a deposit and provide an initial estimate of size, shape, structure, and grade of the mineral in the mine. It is to be ensuring that enough mineral data available during auctions to encourage bidders for these mines, whenever they come up for auction. The bidders will be more interested during the auction as they have solid data on which they can make their bidding decision. The exploration for any mineral deposit involves four stages: reconnaissance survey (G4), preliminary exploration (G3), general exploration (G2) and detailed exploration (G1).

Major mining leases in Odisha lapsing by March 31, 2020, include the ones held by Rungta Mines, KJS Ahluwalia, Serajuddin & Company, Kaypee Enterprises, Kalinga Mining Corporation, Mid East Integrated Steel Ltd, KN Ram, RB Das, Tarini Prasad Mohanty, KC Pradhan, and Lal Traders.

There are some requests being put up for working on proposal to extend validity of merchant mines leases expiring on Mar’20. However, no firm clarity was received on the same.