Will Odisha Govt Auction Sukinda Chromite Mine?

The Odisha government will likely auction the Sukinda chromite mine in Jajpur district which, according to an earlier decision taken by the state government, was 'reserved' for the Odisha Mineral Exploration Corporation Ltd. (OMECL) - previously a subsidiary of Odisha Mining Corporation (OMC) but now a full-grown independent agency that can undertake mining activities on its own.

A notification to 'de-reserve' the mine, containing 95.8 MnT of chrome ore deposits, is likely to be issued soon and the blocks could be advertised as early as next week. The decision comes in the wake of the Centre's ordinance amending the MMDR Act that allows for seamless transition of environmental and forest clearances to successful new bidders.

Odisha had kick-started the auctions of working mines by first putting two non-captive chromite blocks under the hammer - the Kamarda deposit mined by BC Mohanty and the Saruabil mine by Misrilall Mines. Both mines were acquired by TS Alloys, a Tata Steel subsidiary, at astronomical bids of 96.8% and 88.5% respectively.

Choosing to reserve for OMECL Tata Steel's Sukinda chromite mine and RP Sao's iron ore mine, the state government had earlier written to the Centre for approval.

Many ferrochrome manufacturers are entirely dependent on OMC for their raw material requirements and had lobbied unsuccessfully for the non-captive chromite mines to be reserved for a PSU. SteelMint learned from the Government sources that the Centre's ordinance makes no provision for a lease reserved for a state PSU despite the fact that the Centre was well aware of (the) decision to reserve these deposits.

Tata Steel has built a proper township around the Sunkinda mine and OMECL would have had to compensate the steel behemoth for its assets if it had acquired the right to mine the reserve. Mammoth additional investments would accrue from converting the 120-metre open cast deposit into an expensive underground mine.

Now that the Sukinda block is likely to go under the hammer, aggressive bidding can well be expected from both Tata Steel and other biggies in the fray.