Fresh norm on forest clearance saves closure of key mines

A recent modification in the guidelines of Union Ministry of Environment, Forest and Climate Change (MoEF) about obtaining clearance for entire forest area in a mining lease has saved closure of key iron ore and chromite mines of Odisha Mining Corporation (OMC) and other private mines.

The modification allows all operating mines to obtain clearance for entire forest area before January 31, 2016, extending the earlier deadline by a year.

Earlier this month, chief secretary G C Pati had requested the Centre to extend the deadline by at least six months in favour of four major mines of OMC, a state government PSU.

The OMC mines include two main chromite leases - South Kaliapani, Sukurangi and two key iron ore mines - Daitari, Gandhamardana (B). OMC, the only chrome ore trader in the country, auctions nearly 80,000 tonne stainless steel ingredient every 45 days to several ferrochrome and stainless steel producers such as Jindal Stainless Steel (JSL).

Similarly, the Daitari iron ore mine, estimated to have about 50 million tonne deposit, produces around 2 million tonne ore per annum and OMC has plans to raise the output capacity to 3 million tonne a year. Gandhamardana (B) is also a key source of raw material for many sponge iron plant of Odisha and adjacent West Bengal state.

All these four mines, and already shutdown Kurmitar iron ore mine of OMC could not obtain the forest clearance as per MoEF guidelines within the stipulated time, and hence, anticipating closure of the mines and loss of revenue, the state government had requested for relaxation in the norms.

In 2013, the Union Ministry of Environment and Forest (MoEF) had issued a guideline directing all mine leaseholders to obtain clearance for entire forest land falling in their leased area within two years before January 31, 2015, modifying an earlier provision where miners were allowed to get partial conversion of forest area as per their excavation plan. In the MoEF notification dated 20 January this year, the time period has been extended to three years, instead of two years mentioned in the 2013 guideline.

"The fresh changes will benefit all mining leases including OMC which did not obtain the clearance within the deadline. The modification implies OMC will not have to shut down its mining operation after January 31. All other formalities will be completed in the meantime," said a government official with direct knowledge of the matter.

Continuance of OMC mining operation is significant as it has been providing linkage iron ore to the local steel plants, constituting half of its total iron ore output, at the rate derived from on-line auction for end-use plants while offering the rest output to traders at the national level. The steel units which are eligible for raw material linkage from the state-run miner include Essar Steel, Brahmani River and Pellets Ltd (BRPL), Jindal Steel and Power Ltd (JSPL), Visa Steel and Bhushan Steel.