Odisha issues resolution to auction mining leases

The state steel & mines department has issued a resolution to enforce the decision of the state Cabinet to auction all mining leases awaiting second and subsequent renewal.

Last week, the Cabinet decided to dispose off all major mineral leases, captive and non-captive, except coal, through auction.

The policy would be applicable to mineral leases awaiting second and subsequent renewals, including the 18 iron ore and manganese mines that were awaiting express orders from the state government for reopening after their closure on the basis of the Supreme Court order in May last year.

The Cabinet in its meeting held on January 5 decided that there is a need to bring a systemic change in allocation of mineral resources of the state through a transparent policy which will ensure maximum revenue generation to fund the development needs of the state, create job opportunities, promote the use of modern technology and ensure optimal utilisation of mineral resources. Accordingly, it has been decided to allocate mineral resources through a transparent bidding process, while taking note of the requirements of the domestic industry, the resolution stated.

The leasing of major minerals will be done through public auction after obtaining leave of the Supreme Court by filing a petition. Miners, however, have decried the government's move to auction the leases, saying the decision was taken unilaterally without consulting all stakeholders and was legally untenable.

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 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 licence (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. The auction would invariably apply to all other leases of major minerals awaiting second and subsequent renewal along with determined and lapsed leases.

In order to encourage competition and to ensure a more broad based and equitable distribution of mineral resources, the area of ML allocated to a single non-captive entity would be limited to a reasonable extent even below the ceiling of 1,000 hectares prescribed in the Mines and Minerals- Development & Regulation Act (MMDR) Act. The exact ceiling would be decided after the modalities are worked out by the committee.