Centre urges Odisha govt to hold on mineral block auctions for now

Odisha govt's proposal to hike area limits under scrutiny

The Union mines ministry has dispelled all doubts regarding the future of mineral block auctions in Odisha.

In the latest letter to the state steel & mines department, the ministry has called for initiating the auctions process after a decision is taken on the proposal to relax the area limit of mining lease (ML) in the state.

“The proposal of the state government of Odisha for increasing the area limit for mining leases of iron ore and associated minerals under Section 6 (1) (b) of the MMDR (Mines & Minerals Development  and Regulation) Act is under examination of the ministry. Therefore, it is requested that the state government may initiate any auction process after the decision in this regard is conveyed to the state”, said a letter by Veena Kumari Dermal, director with the Ministry of Mines to additional secretary (steel & mines), Odisha government.

The central mines ministry in a previous letter (in July) had asked the state government to disallow bidders who held an area in excess of the area limit prescribed under Section 6(1) of the MMDR Act. 

In its reply, the Odisha government said it had constituted a committee chaired by R K Sharma, additional chief secretary (steel & mines) to consider the case for revising area limits of a mine lessee.

Backing its demand to increase limits, the state government cited the example of Steel Authority of India Ltd (SAIL), a central public sector enterprise (CPSE) which holds an area of 55.01 sq km in mining leases of iron ore and associated minerals in Odisha. Apart from this, the central government has also reserved an area of 2.77 sq km for the exploration and exploitation through SAIL in 2004 by invoking the provisions of Section 17A-1A of the erstwhile Mines and Minerals- Development & Regulation (MMDR) Act of 1957.

Based on the recommendations made by the committee, the state government requested the government to enhance the area limits for mining leases in Odisha to 58 sq km for iron ore and associated minerals in exercise of powers conferred under provisions to Section 6 (1) (b) of MMDR Act in the development of mineral and industry.

The lack of consensus between the Centre and the state had delayed the process of auctions of freehold blocks as well as the leases headed for expiry by March 31, 2020.

On July 31 this year, the state steel & mines department had issued Notice Inviting Tenders (NITs) for seven non iron ore blocks. Eleven more virgin blocks including eight of iron ore were ready to be notified for online auctions.