Tata Steel, Jindal Stainless Ltd (JSL) and Indian Metals & Ferro Alloys Ltd (IMFA) are in the race to acquire two lapsing chromite blocks to be offered for online auctions by the Odisha government.
Representatives drawn from these companies and others like BC Mohanty and Odisha Cement Ltd (OCL) attended a pre-bid conference last evening organized by the state steel & mines department. Over and above the chromite resources, the state government is also offering limestone and graphite blocks for auctions. The modalities for electronic auctions have already taken off with the department issuing Notice Inviting Tenders (NITs) in respect of these blocks on July 31.
“The pre-bid conference was attended by officials from about 30 companies. We anticipate a good bidding interest for all the blocks to be auctioned”, said a government official.
The state directorate of mines has invited financial and technical bids in respect of four limestone blocks- Pipalmunda, Khatkurbahal (North), Behera Banjipali and Garramura, one graphite block- Jagdalpur and two lapsable chromite deposits- Saruabil and Kamarda. Presently, the chromite blocks are under the leasehold of BC Mohanty and Misrilall Mines, both merchant miners with their leases headed for expiry by March 31, 2020. Both the chromite blocks are being auctioned without end-use reservation.
The deadline for purchase of tender document is September 11. Participants can submit their bids latest by September 20.
The eight blocks between them possess 144.58 million tonne reserves with the estimated resources valued at Rs 21,773.21 crore.
In this fiscal, Odisha has targeted to put 40 mineral blocks to online auctions- 16 merchant and 24 new mines. The 16 merchant mines have an approved capacity to produce 79 million tonnes of iron ore per annum. The cessation of their lease validity by March 31, 2020 has triggered concerns on raw material crunch that might stalk the end-user industries, especially the non-integrated steel producers which are operating without captive mines. The lapsing of these mines will knock off 55-60 million tonnes of iron ore supplies from the open market.
Auctions of iron ore and associated minerals have been kept in abeyance by the state government at the behest of the Union mines ministry. The ministry has instructed the state steel & mines department to hold on to the auctions till a decision was firmed up on the proposal to relax the ceiling on mineral lease area limits. As per the prevailing Section 6 (1) (b) of Mines and Minerals- Development & Regulation (MMDR) Act, any lessee who already possesses 10 square kilometers (sq km) or more of the area is debarred from acquiring one or more mining leases though there are no curbs on participation at auctions.
The state government had been persistently urging the ministry to revise the cap on mining lease area in Odisha to 58 sq km. It may be noted that the cap on mine lease area has been raised upwards to 50 sq km in Chhattisgarh and 75 sq km in Jharkhand.
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