BHUBANESWAR: As the state government is clearing the decks for auction of at least 10 mineral blocks in July, officials involved in the process said this may not be possible for more than one reasons.
Casting doubt over the due diligence report prepared on each mining lease area to be auctioned, informed sources said there are many loose ends to tie.
“In some of the mines, whose lease period is expiring in 2020, the prospecting done by the lessees does not cover the entire area. This is due to several factors including lack of forest diversion. Status of mineral occurrence in these areas is not known,” the sources who did not want to be identified said.
The lease of 24 merchant mines is set to expire by March 31, 2020.
Under the Mines and Minerals (Development and Regulation) Amendment Act 2015, licences of expiring mines will not be renewed and the mines will be allotted on the basis of auction.
“While some lessees have surrendered part of their lease areas, the state government is yet to consider their request.
The leaseholders have not conducted exploration of the areas. The entire area has to be auctioned now as the surrender process is not complete yet,” said former Director of Mines BK Mohanty.
As per the amended provisions of MMDR Act, the leases have been given six months to dismantle the infrastructure and move out of the area.
This is simply not attainable since they will undertake mining till the last date of lease.
With pressure mounting on the government for early auction of the mines, the issue was discussed at high level meeting chaired by Steel and Mines Secretary RK Sharma here last week.
A decision was taken to auction at least 10 mining blocks in July even if these blocks are not fulfilling all the parameters.
Exuding confidence of putting some mineral blocks under hammer, Steel and Mines Minister Prafulla Mallick said, “We have already chalked out plans to auction 5 to 10 out of 36 mineral blocks in July so that ore production is not hampered.”
He said 36 mining blocks are ready for auction out of which 12 are virgin. Disruption of mining in the rest 24 mines will create chaos in the iron ore market in the country as they account for a sizeable percentage of production at the moment.
The state produces about 120 million tonnes of iron ore out of total national production of about 200 million tonnes.
As many as 16 out of 24 mines are of iron ore. These mines together produce nearly 60 million tonnes.