Odisha HC stalls resolution to auction mining leases

In a major jolt to the state government, the Odisha High Court (HC) has restrained the government from going ahead with its resolution to auction mining leases in the state awaiting second and subsequent renewal.

The HC has fixed February 4 as the next date of hearing. Till the next hearing, the state government is barred to implement its January 8 resolution adopted to enforce the decision taken by the state Cabinet on January 5 to offer leases on the bidding route.

"The HC has stayed our resolution. As per the court's pronouncement, we cannot implement the resolution or take any decision on leases awaiting second and subsequent renewal," said a senior state official.

He said, the government was contemplating moving the Supreme Court but may possibly wait till the HC's next hearing.

Earlier, miners and industry experts had decried the state government's decision to offer mining leases via the auction route, terming it 'legally untenable'. They pointed out that the move was discriminatory and the state government announced a unilateral decision without taking the stakeholders into confidence.

The state Cabinet, on January 5, had decided to dispose off all major mineral leases (awaiting second and subsequent renewal), both captive and non-captive, except coal, through auction. The decision presumably hurt the interest of 18 iron and manganese ore mines which were awaiting express orders of the government to restart operations.

A Supreme Court order in May last year triggered temporary closure of 26 iron and manganese ore mines that were waiting for second and subsequent renewals and were operating under the provisions of 'deemed extension'. The top court declared operations of such mines illegal unless the state government issued express orders under Section 8 (3) of the erstwhile Mines and Minerals - Development & Regulation (MMDR) Act, 1957.

Complying with the apex court's interim order, the state government passed express orders for eight mines, including four held by Tata Steel, three of Steel Authority of India (SAIL) and one of state run Odisha Mining Corporation (OMC). But instead of passing similar orders for the balance 18 mines, the government decided to auction them.

After the Cabinet decision, the state government came out with a resolution dated January 8 and a notification in the Gazette a day later, to allocate mineral resources through a transparent bidding process.

The proposed auction will not apply to those leases that have already been issued grant orders and are awaiting execution of lease deed by the state government provided all such lease deeds are executed within the specified period.

Those mining leases awaiting approval of first renewal will also be out of the purview of auction. The Cabinet decision on auction will not be applicable to all the existing leases of state-run miner Odisha Mining Corporation (OMC) and all other central and state public sector undertakings. Also, the auction would not apply to such leases for which the state government has already recommended prospecting license (PL) or mining lease (ML) to the Government of India in pursuance of an agreement or memorandum of understanding (MoU) for allocation of PL/ML provided the applicant had substantially fulfilled its obligations.