Odisha Govt Initiates Action to Restart Merchant Mines

Amid a phase of lockdown and lull, the Odisha steel & mines department has initiated action to resume operations of merchant iron ore, manganese and chromite mines whose lease validity had ended on March 31, 2020.

The state government had successfully auctioned 21 lapsing merchant mines and Letters of Intent (LoIs) were issued to all successful bidders. But a countrywide lockdown and unavailability of manpower and truckers owing to the widespread Coronavirus scare had cast doubts on the future of their operations.

In a letter to the state forest & environment department, Deepak Mohanty, director of mines and special secretary (steel & mines) has urged for collection of NPV (or Net Present Value) at the rate of Rs 7.5 lakh per hectare. The collection of NPV will enable the state authorities to issue vesting orders- a prerequisite for recommencing mining from the merchant leases. The state steel & mines department would issue vesting orders under the provisions of Mineral Concession (Amendment) Rules, 2020.

NPV is collected for diversion of forest land for non-forest purposes. The mining leases where activity would restart have forest land area. Officials of forest & environment and revenue department, as well as representatives drawn from circle mining offices, have jointly carried out the Differential Global Positioning Survey (DGPS) of these leases under the technical assistance of Odisha Space Application Centre (ORSAC).

The online auctions of 21 mines in the state had elicited a resounding response with average premium standing at 105 percent. JSW Steel emerged as the key disruptor at Odisha's online auctions, bagging four iron ore blocks. ArcelorMittal secured the Thakurani merchant mine after committing a premium of 107 percent. Even Goa's leading merchant miner Fomento Resources gained a toehold into Odisha's merchant iron ore market, winning the Nadidih mine at a premium of 147 percent. Among other key steel makers, Naveen Jindal led Jindal Steel & Power Ltd (JSPL) bagged the Guali iron ore deposit formerly held by RP Sao. Serajuddin & Co retained one of its operative iron ore mines whilst Tata Steel retained ownership of its Sukinda chromite mine.

It may be noted that all mining activity in Odisha at merchant mines has come to a near standstill since the enforcement of the lockdown orders to combat COVID-19 global pandemic. Merchant miners reported no fresh production or despatches or iron ore between March 19 and 31. Only some pre-booked orders for iron ore were despatched.

Please click link for mines official letter