India: Stamp duty and land issues raised at pre-bid conference of Odisha govt

About 65 companies participated in Odisha's pre-bid conference on 6 august and submitted questions in writing running into hundreds. The virtual meeting in the run up to the auction of 11 deposits was attended by the usual suspects, steel majors such as JSW Steel, AM/NS, and Tata Steel as well as miner such as Vedanta, Adani and Rungta.

The areas the government is putting to auction, almost one and half year after the last ones, are largely greenfield, and some of them are small reserves. Officials speaking on condition of anonymity told SteelMint that a recurrent question during the pre-bid conference was, must the bidder pay stamp duty for the entire 50 year life of the lease when it is mostly likely to exhaust mineable resources before that? The second clarification asked by more than one player was how does the successful bidder acquire rights to schedule land or land reserved for Schedule Tribes within these new leaseholds?

The government's answer to both is expected to be: as per the prevailing laws.

The Indian Stamp (Odisha Amendment) Act 2013 requires an upfront payment of 15 % of the amount of average royalty accruing out of the highest permitted production approved under the mining plan, multiplied by the lease period, which post 2015 is 50 years. This in Odisha is charged on the basis of the highest grade of ore, something that miners have gone to court against.

Odisha's land laws related to schedule bars any transfer of property by a Schedule Tribe member to a non-ST. Some participants also wanted to know whether the state would help them get clearances. The Centre's last amendment transfers Environment Clearances and Forest Clearances to new project proponents, but most of these mines up for grabs are greenfield areas. Two of the areas, Unchabali and the manganese deposit Kalimati, are being offered with "embedded clearances", an experiment being pushed by the Centre and being executed by the state with some reluctance on smaller reserves.

The cut off for sale of documents is 5 pm, Thursday, 19 August by when there should be greater clarity on the interest in these greenfield deposits.