By Our Correspondent
BHUBANESWAR: The Odisha government’s proposal to penalise the auctioned mines for their failure to meet MDPA commitments could if actually implemented, bring relief to many steel-makers dependent on Odisha’s iron ore. This may increase iron ore supplies in the state in the coming months.
Many new leaseholders, who had bagged the rights to operate mines in Odisha in January 2020, had been show-caused in August and September this year for not producing ore as per minimum production requirement. The Odiha Directorate of Mines, has now sought departmental approval to slap them with penalties, charged at 24% of average sale price, as published by IBM, on their monthly shortfall in despatch, which is to be appropriated from their respective performance security.
Those who won mining rights through auctions must produce at least 80% of the average production of an iron ore mine in the preceding two years – in the first two years of their operation. The need for such a rule under MDPA (Rule-12A of MCR, 2016) was to ensure no new leaseholder could afford to squat on precious mineral resources after bidding high premiums for mines.
As against a production of 123.8MT iron ore in Odisha from Jan 2019 to Nov 2019, total production in the same period in current year has been only 98.2MT. Out of the recently auctioned 24 mines in Odisha, only 5 have been able to start production and dispatch till date. This is the main reason for shortfall in iron ore supply in the country.
Only 5 have so far started operations while rest keeping quite. Jajang, Nuagaon, Narayanposhi, Ganua iron ore mines of the JSW Steel Limited, Thakurani iron ore mine of M/s Arcelor Mittal have started operations but others yet to resume operations.In total, 27 auctioned mines with 5 only operational making revenue and employment loss, shortage of materials affecting medium and small scale industries and hitting export and imports of minerals in Odisha, sources said adding royalty, DMF and NMET also.
Successful bidders like Tarama Apartment, Vishal LPG and Foment and few more are not a mood to start operation in their winning blocks under Joda-Koira circles of Odisha’s Keonjhar and Sundargarh. Balda iron ore mine of the Serajjudin Company also not started operations even though the firm had already announced to resume mining work. Jindal Steel and Power Limited, which had got Guali Iron Ore block, earlier held by RP Sao and Sons , also likely to not start operations citing various technical reasons like boundary issues and low quality iron ore while State Government has reportedly asked State owned OMC to look into Guali Block.
Goa based Mining firm, Sociedade De Fomento Industrial Pvt Ltd(SFL), which had got Nadidih Iron Ore & Manganese Block on February 10 this year at a premium of 141.25 earlier held by Rungta Mines Group, has moved Odisha High Court against changes in mining auction terms and conditions. Nadidih iron and manganese mine, covering an area of 121.405 ha, in Odisha’s Sundargarh district is one of the oldest mine in the Koira mining sector, it has been in operation since January 1961. The mineral block with a geographical area of 73.85 hectares and mineralised area of 36.6 hectares is expected to have iron ore deposit of 20.48 million tonnes.
Meanwhile, the Government is considering to increase of the permissible iron ore stack size from 4,000 tonnes to 20, 000 -25,000 tonnes, nearly six times of the present stack norms. The State Government seems want to streamline dispatch movements of minerals. With mining operations yet to come to normalcy under Joda-Koira-Sukinda circles, thousands of truck and tipper owners, locals labour forces, small traders and others depending on it, facing tough time, sources added.
