India: Jharkhand govt to auction old iron ore stocks from mines in Saranda region

The Jharkhand government has announced that it would start auctioning already-mined iron ore stocks lying at mine sites in the Saranda forest region of the mineral-rich state's West Singhbhum district, SteelMint learnt from recent reports.

As a first step in the auction process, old stocks of iron ore lying at the Ghatkuri iron ore mines and the Rajabeda mines in the hilly and forested Saranda region have been identified for sale for which e-tenders would be floated. Both the mines are registered under the name of Padma Kumar Jain of Chaibasa.

The Jharkhand State Mineral Development Corporation (JSMDC) is the nodal agency through which the auction will be conducted.

Centre turns down reservation proposal

SteelMint had reported in early-Feb'21 that the Centre had turned down the Jharkhand government's proposal to reserve seven expiring iron ore mines in West Singbhum district for a state PSU, asking the Hemant Soren government to auction the mines instead.

These seven mines spread 1,178.59 ha, with total reserves of around 230 mn t of iron ore, are located at Karampada, Ghatkuri, Thakurani and Baraiburu in the district and were operated by private companies prior to their expiry on 31 Mar'20.

"Reservation of blocks for Government companies may be taken up only in cases where subsequent to auction the successful bidder fails to execute the Mining Lease or after the execution of Mining Lease the lease holder fails to start production as prescribed," a letter from the Union Ministry of Mines to the Jharkhand government, dated 2 Feb'21, stated.

A recent example of this was the allotment for 10 years of the Guali and Jilling-Langalota iron ore mines in Odisha to state PSU miner Odisha Mining Corporation (OMC) after months of non-commencement of operations after the auctions in early-2020. However, the country's minerals rules also envisage the auction of mines lying used for years with government companies, for example steel behemoth SAIL.

Shrinking space for private companies

The state government's proposal to reserve the seven expiring mines also met with opposition from former Jharkhand Chief Minister Babulal Marandi who opined that any sort of reservation of the mines was in violation of the National Minerals Policy (NMP), 2019.

In his letter to Union Mines Minister Prahlad Joshi, Marandi claimed that 70% of Jharkhand's total mining area, covering 115.32 square km, is currently being held by captive miners SAIL and Tata Steel. If the seven mines are reserved for government companies, he further claimed, only about 15% of the mining area would be left for private companies, which would be in violation of the NMP's vision of fair distribution of resources.

The Jharkhand government's stated mineral policy is to reserve iron ore mines for companies with steel plants in the state. The state government has previously been dragged to court, including the country's apex court, for turning away private companies after promising to dole out mines in the Ghatkuri iron ore block.

The Supreme Court, however, eventually upheld the Jharkhand High Court's ruling that the state has the sovereign right to reserve mineral blocks.

With inestimable mineral wealth awaiting exploration, Jharkhand has 27% of India's coal reserves and about 26% of the country's total iron ore reserves.