Will mining auction process completes by March 31, 2020 in Odisha?


By Our Business Affairs Bureau

BHUBANESWAR/JODA/KOIRA: Will mining auction process completes by March 31, 2020 in Odisha? This is a billion dollar questions that has been asked by  several industry watchers.

Sources closely monitoring the auction process of 22 from Odisha out of 250 Iron Ore Mines Lease will expire on 31 March, 2020 all over the country, however apprehended that auction process will not be completed before 31 March 2020.

“If auction will be completed getting statutory clearances will take long time even years together,” sources said adding it will take at least three long years to get other statutory licenses like Forest Clearance, Environment Clearance and a host of other clearances.

 Odisha, being one of the top most leaders in Iron Ore production, similar situation will arise in 2020-21 as majority of Iron Ore Mines will face stoppage due to expiring of Mining Lease on 31 March.

State Government is planning to ramp up production in the mines of Odisha Mining Corporation (OMC) as the State PSU will be able to provide much needed Raw Material Provisions in an impartial way.And some of the Private Mining Companies leases are not expiring on March 2020, so that these Mining Lease Holders can boost up their production to help out the Steel Makers.

Union Steel-PNG Minister Dharmendra Pradhan has already said that the Central Government is  targeting for 300 Million ton of Steel by 2025. The Union Steel Ministry has also admitted that country is likely to face about shortage of 50 Million Ton of Iron Ore in 2020-21 and it will adversely affect the Steel Sector.

 Meanwhile, the Union government plans a slew of reforms in the mining sector, including giving a big push to commercial mining to help attract investment and improve mineral production in the country.

As part of this, highly placed sources said the government would discontinue the practice of offering mining rights for mineral resources, including coal, to companies for captive use. Instead, a new hybrid mining lease agreement would be framed under which companies would be free to use extracted mineral both for captive use of end use plants (power, steel, cement etc) and commercial sale in the open market.

A high level committee headed by NITI Aayog vice chairman and having top representation from ministries of finance, mines, coal and environment, has suggested that all mines hence forth be auctioned for commercial production. For companies taking mines largely for captive use, 50 per cent of production from those mines would be permitted to be sold in the open market under the new hybrid lease agreement.

Sources said the government has accepted these recommendations and necessary changes in mineral laws would be made to allow the reform measures to take shape.

The high level committee has suggested that changes in grant of mineral rights with the option to do both captive and commercial mining may be applied prospectively for all exploration and mining activities.

In addition to extraction of main mineral, the hybrid model will also allow leaseholders to extract other minerals found in their mine lease area on payment of 10 per cent of the quoted revenue share for the main mineral.

For existing captive mines allocated before the auction mechanism was made mandatory for grant of mineral leases, the high level committee has suggested the companies can use surplus mineral in their new end-use units formed under a joint venture agreement with a minimum 26 per cent shareholding.

Mining has been identified as a critical activity that needs a big push to help other capital intensive and employment generating industries. The sector is braving a slowdown that has seen declining investment and production.


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