By Our Business Affairs Bureau
JODA/KOIRA/PARADIP(ODISHA): The COVID-19 onslaught, which so far till Wednesday afternoon, took 1 life and affecting 41 ,and normal life in Odisha and other parts of the Country has been badly hitting in view of the nationwide lockdown imposed by the Prime Minister Narendra Modi to contain the spread of the pandemic, it seems, there was no takers for Merchant Mine owners in this mineral rich State. Big Merchant Miners like Rungta Mines Group, Essel Mining and Industries Ltd, Serrajuddin Mines and few others are facing tough time with their legally produced minerals not getting transported.
“Almost all merchant miners are sitting on massive account of iron ore. They are clueless on how this stockpile would be liquidated. No shipments of iron ore are being sent overseas as demand has dried up. Going ahead, the situation would be critical for merchant leaseholders as consumption from steel and other end use industries will be subdued post the Covid-19 outbreak.Merchant mines will be forced to ramp down production and go for salary cuts of the employees to stay afloat in a depressing market”, said sources in Joda-Koira region, in Keonjhar-Sundargarh.
Since the enforcement of lockdown orders, barely any activity has occurred at the merchant leases under Joda-Koira circles of Keonjhar and Sundargarh between March 19 and 31.With no major export demand and less consumption consumption in the domestic market in the aftermath of Coronavirus outbreak, has left merchant iron ore miners in Odisha upset.
No fresh production or despatches of iron ore happened during this period of lull. For merchant mine owners, the only glimmer of consolation was the movement of some pre booked iron ore. Barring captive mines, especially the ones under the leasehold of Tata Steel and Steel Authority of India Ltd (SAIL), there is no buzz of activity at other mines in the state.The outbreak of Covid-19 has only delayed the process of recommencement of mining from the merchant leases. The validity of these leases ceased on March 31, 2020.
Odisha had successfully organised online auctions of 21 iron ore, manganese ore and chromite mines formerly under the custody of merchant mines. The state government had even issued Letters of Intent (LoIs) to all successful bidders. After the expiry of their lease tenures on March 31 this year, these mines were supposed to start operations seamlessly. To facilitate their uninterrupted operations, the Central government by virtue of an Ordinance, had extended the validity of all statutory approvals by two years.
But the outbreak of Covid-19 and the consequent announcement of lockdown had thrown a spanner in the works of these mines. Of late, the state steel & mines department has initiated some activity to recommence operations at these mines.
Steel and Mines Department sources said with the Odisha government has called for realisation of NPV (Net Present Value) at the rate of Rs 7.5 lakh per hectare for forest area falling within the mining lease. NPV is the amount collected for diversion of forest land for non-forest purposes. Collection of NPV is a precondition to issue vesting orders under Mineral Concession (Amendment) Rules, 2020 for enabling restart of the merchant mines.
The outbreak of the deadly Covid-19 pandemic has queered the pitch for seamless continuity in operations of 21 iron ore, manganese and chromite mines in Odisha. The state government had recently auctioned these blocks whose leases are expected to expire by March 31, 2020.
To facilitate a smooth transition in ownership of mines and their uninterrupted operations, the government, through an Ordinance, extended the validity of all statutory permits by two years. The state government too, showed alacrity in completing auction formalities well before the end of lease tenure of mines. But a nationwide lockdown to contain the spread of coronavirus and the consequential delay in paperwork needed to resume these mines is bound to delay the recommencement of the mines. Miners expect a delay of at least a month.
“Only a few critical departments of the state machinery are functioning amid this Covid-19 induced lockdown. Since the steel & mines department is not operative now, the new leaseholders have to wait for necessary approvals. All successful bidders need a vesting order from the department before they could extract ore from the blocks”, said an industry source.
The delay in timely resumption of merchant mines had raised fears of demand-supply mismatch. Together, the 21 mines have approvals to raise around 70 million tonnes per annum. Most of the small to mid scale steel plants, sponge iron units and pellet makers are dependent on the merchant ore market to feed their units.
A standalone iron ore miner feels the secondary steel players might suffer owing to delay in mining activity at the lapsing blocks. On the contrary, many steel plants have already amassed iron ore stock sufficient to last for three to six months.
Also, in the aftermath of Covid-19, transportation of raw materials has diminished by nearly a half due to non-availability of enough drivers to ply trucks and curbs imposed on inter-state freight movement. What has stuck out like a sore thumb is the dread among workers over Covid-19 scare.
A letter from the Union steel secretary to state governments to ease lockdown orders on operative mines, steel industries, process plants as well as entry and exit of workers and movement of raw materials and finished products to and from the plant premises has not fully calmed frayed nerves.
“Though we have been freed from the restraining order, we are unsure if we could get the manpower to run normal operations. There is still trepidation among workers”, admitted a merchant miner.
