Odisha govt grants a month's relief to ex-lessees to clear out iron ore stocks

After accessing official despatches issued by the Directorate of Mines, Odisha government, and subsequent to interaction with high-ranking officials, SteelMint has come to learn that the Odisha government, under the Mineral Concession Rules, 2016, Rule 12 (1) (hh) has issued a notification for granting time till 31st Oct'20 to ex-lessees of iron ore mines auctioned in Mar'20 in order to evacuate minerals and mine equipment from the respective sites.

According to SteelMint estimates, 28.04 mn t of overall iron ore inventory, with the ex-lessees of mines in Odisha that changed hands after 31st Mar'20 post the auctions, is still lying at mine heads.

The material had to be exhausted before 30th Sept'20. Now, the Odisha government has stepped in to supply mine-specific inventory and evacuation figures, not to forget granting an additional month's time for evacuation of the material that has come as a relief to the ex-lessees.

Data available with SteelMint show that against an inventory of 46.96 mn t on 31st Mar'20, the quantum of despatches by the auctioned mines as on 30th Sept'20 ought to stand at 18.92 mn t.

In fact, balance inventory with K.J.S. Ahluwalia's former Nuagoan mine (now with JSW Steel) stands at 10.7 mn t, while at Serajjudin's Balda block (that the merchant producer retained at the auctions) inventory is pegged at 8.5 mnt.

In the Guali iron ore block that steel major JSPL bagged from R.P. Sao at the auctions, and where operations are yet to resume due to a land boundary and mine mapping dispute, inventory of 4.21 mn t is lying at the site, according to SteelMint data.

In effect, the ex-lessees now have time till 31st Oct'20 to evacuate this stock.

"In case they are unable to dispose of this accumulated stock by 31st Oct'20, the state government wouldn't be able to extend the timeline further as no such clause exists in MC Rules, 2016," a senior official of the Directorate of Mines, Odisha, told SteelMint.

"Of course, if the ex-lessees are unable to evacuate stocks by then only a legal intervention can allow them to continue asking for a prolongation in the timeline to dispose stocks," he further informed.

In view of the tardy disposal of accumulated stocks, it is unclear whether such a situation could arise in the near term.

Odisha dispatch position of minerals by Ex-lessess: