Odisha to auction 31 lapsing mineral blocks, notification likely in 2019

Odisha, the largest iron ore producer and the repository of other key non-ferrous minerals, is gearing up to conduct auctions of 31 mineral blocks lapsing by March 31, 2020. The blocks in question are non-captive leases due to expire as per the provisions contained in the amended version of Mines and Minerals- Development & Regulation (MMDR) Act, 2015.

“We have given necessary instructions to the leaseholders to prepare the geological reports and submit it latest by March 2019. The state government is very keen on a seamless transition in ownership of the lapsable blocks. We hope to issue the notification to auction such blocks by April 2019 well in advance of their lease validity expiry,” said a government official.

Among the 31 leases headed for expiry by the end of March 2020, there are 17 iron ore leases whose annual production capacity totals to 66 million tonnes. Unless these blocks are suitably prepared for auctions before their validity ends, it might trigger a raw material crisis as Odisha's iron ore feeds steel plants across the country. If other states such as Karnataka and Jharkhand are factored in, the total loss in iron ore production capacity could be 85 million tonnes a year, said an industry source.

Major mining leases in Odisha lapsing by March 31, 2020, include the ones held by Rungta Mines, KJS Ahluwalia, Serajuddin & Company, Kaypee Enterprises, Kalinga Mining Corporation, Mid East Integrated Steel Ltd, KN Ram, RB Das, Tarini Prasad Mohanty, KC Pradhan and Lal Traders.

Mineral-bearing states who dragged their feet on auctions of the lapsing blocks have been getting repeated reminders from the Union ministry of mines to prepare the roadmap for a transition. 

These states are scrambling to prepare blocks lapsing by March 31, 2020, for auctions. The urgency to ready the mineral blocks for auction stems from the recent notification of the Draft Mineral Concession and Development- MCDR (Amendment) Rules, 2018, by the Government of India.

The MCDR is proposed to be amended to draw the roadmap for exploration so that the blocks can be auctioned before their validity ends. This is being done to ensure that the production of key minerals like iron ore, manganese and chromite is not severely impacted due to the expiry of the leases. The Union mines ministry has targeted to auction the blocks by May 2019.

According to the notified rules, mine leaseholders are required to submit exploration plans in 60 days from the date of the notification. Thereafter, state governments would approve the plans over the next 30 days.

So far, mineral-rich states have been slow to ready the blocks for auctions. With the exception of Andhra Pradesh that has submitted an Action Plan for exploration, progress in other states has been slack.

Data compiled by the Union mines ministry says 288 leases of iron ore, chromite, limestone, manganese, bauxite, graphite, limestone, garnet and kyanite are due to lapse by March 31, 2020. Goa has the most number of mines (160) headed for expiry. Next to Goa are Karnataka and Odisha with 45 and 31 mining leases respectively. Of the 288 mines, 59 are in a working state and the balance are non-working leases.