By Our Correspondent
BHUBANESWAR/NEW DELHI/BARBIL: Successful Bidders in Odisha Mining Auction are facing the music of Union Mines Ministry for not resuming production even after lapse of 7-8 months of auction and have not maintained minimum dispatch for three consecutive quarters. Of the total 46 operating and working mines in the country whose leases expired on March 31, 2020, 24 mines are in Odisha, 7 in Karnataka, 6 in Jharkhand, 4 in Andhra Pradesh, 2 in Rajasthan, 2 in Gujarat and 1 in Himachal Pradesh. All 24 mines in Odisha and 4 mines in Karnataka were auctioned last year.
Non-operationalisation of these mines has created an acute shortage of iron ore in the country, the mines ministry said. Decline in production and dispatch of important mineral such as iron ore not only leads to spike in its market prices but also adversely affects the manufacturing of iron and steel in the country.”It is proposed to strengthen the norms of minimum production / dispatch through amendment of Rule 12A of the MCR Rules, 1960, in order to ensure sustained supply of mineral in the market in future,” the Mines Ministry said.
In Odisha, Naveen Patnaik led Government, has cancelled the vesting order issued in favour of the Shyam Ore (Jharkhand) Pvt Ltd in respect of the Jiling Langlotta Iron Ore Block over an area of 456.037 hectares in Barbil tehsil of Keonjhar district. The Shyam Ore (Jharkhand) Pvt Ltd had been declared as the preferred bidder in the e-auction held in February , 2020 having quoted a final price offer of 135% and subsequently issued Letter of Intent (LoI) for grant of mining lease for the aforesaid mining block. Later, the Government had issued the order to the company for vesting of valid rights, approvals and other clearances.However, the Government alleged that the company failed to comply with the prescribed requirements timely to be considered for being declared as the successful bidder followed with subsequent grant and execution of the mining lease deed within the extended dateline.
The Government has taken action under provisions of the Mineral (Auction) Rule 2015. The State Government also on December 22, 2020 revoked the LoI and ordered for forfeiture of all three instalments of upfront payment of Rs 90,60,13,852 and also the BG of Rs 90,60.13,853 towards performance security. The Government also further ordered debarment of the Shyam Ore (Jharkhand) Pvt Ltd from participation in the future auction to be conducted in respect of the Jiling Langlotta Iron Ore Block.
Sources quoting media reports, that the Union Mines Ministry, which had earlier served an ultimatum to successful bidders to resume production and operations, now reportedly has made a proposal to terminate the iron ore leases of those working mines that have not started production even after lapse of 7-8 months of auction and have not maintained minimum dispatch for three consecutive quarters.
Several successful bidders of such working mines whose previous mining leases expired on March 31, 2020, have not started production even after lapse of 7-8 months of auction. Government plans to end iron ore leases of mines that didn’t start output after 7-8 months of auction.
“The Ministry of Mines has prepared the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession (Amendment) Rules, 2021, seeking to amend the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016,” the mines ministry said. It added that as part of the pre-legislative consultation policy, the draft amendment rules are made available. “Comments/suggestions are invited from the general public, governments of states and union territories, mining industry, stake holders, industry associations, and other persons and entities concerned, on the draft amendment rules.”
Further, many of the successful bidders who have started production have not maintained the production and dispatch quantity up to the level required under Rule 12A of the MCR, the ministry said. “Accordingly, it is proposed to strengthen the norms of minimum production/dispatch through amendment of Rule 12A of the MCR Rules, 1960, in order to ensure sustained supply of mineral in the market in future,” the ministry said.
It added that the Rule 12A is proposed to be amended to mandate the successful bidder to make payment equivalent to the revenue share and other statutory levies that would have been payable at the prescribed level of minimum production/ dispatch targets on a quarterly basis. “It is also proposed to provide in the Rules that failure to maintain prescribed production level for three consecutive quarters may lead to termination of the leases,” the ministry said.
