India: Odisha Defers Auctions Notice on Centre's Signals to Revise Mine Area Limits

Sensing the Centre's approval and expecting a formal letter ratifying the ceiling on mining lease area to 58 square km anytime soon, the state steel & mines department has decided to put off the Notice Inviting Tenders (NITs) for the second phase of mineral block auctions in FY20. The NIT which was supposed to be notified on August 16 has now been deferred to next week. A mining industry source said the NIT could be made public on August 19 after the state government is in possession of the letter from the Mines ministry.

Odisha's top officials at the steel & mines department denied any guidance on the development which is kept hush hush for now.

If the Centre's approval comes through which seems inevitable now, Tata Steel and big merchant iron ore producer Rungta Mines will be eligible for partaking at the auctions. The relaxation of norms on mine lease area cap will especially benefit Tata Steel since Rungta Mines despite a large leasehold area is split into disparate ownership structures.

In the next NIT, the state government has listed 11 blocks in all. The auction roster includes eight iron ore blocks, all virgin or freehold deposits. Included in the list are Chandiposhi and Pureibahal blocks whose online auctions were kicked off in last fiscal. But auctions of the twin iron ore blocks, both in Sundargarh district, were stalled after a Public Interest Litigation (PIL) purportedly backed by Tata Steel's key rival JSW Steel dragged the Odisha government into the Delhi High Court, bitterly opposing the participation of bidders who already occupied more than 10 square km lease area in the state. Acting upon the petition, the court had instructed the Odisha government to put auctions on hold till clarity emerged on the eligibility rules.

The tussle between the Mines ministry and the state government hung on till the ministry finally shot off a letter, calling for filtering out bidders who already possessed over 10 square km of lease area. Not to be bogged down, the state steel & mines department wrote back, making an earnest plea to ease the rigid participation rules. Odisha, in its letter, cited the example of SAIL, a maharatna central public sector enterprise (CPSE) whose multiple mines were already straddling over 57 square km in the state.

After the war of words between Mines ministry and Odisha is laid to rest, the state is expected to bid out the lapsing merchant iron ore blocks as well. There are 21 such blocks whose tenure ends by March 31, 2020. All the blocks are eligible to be auctioned as they are explored up to the G2 level.