Odisha falls behind in pace of mineral block auctions, Karnataka leads

Odisha was the first off the mark in auctioning an iron ore block, but is now trailing in putting more online for sale.

Out of the 68 mineral blocks auctioned across India till August 6, only five were up for bidding in Odisha: three iron ore and rest limestone and manganese.

Karnataka led the field by auctioning 18 blocks. The figure includes 14 Category C mines, which were auctioned on the Supreme Court's orders before the amended Mines and Minerals- Development & Regulation (MMDR) Act of 2015 was promulgated. Last month, Karnataka auctioned four iron ore blocks- three of which were pocketed by JSW Steel and one by MSPL Ltd, a flagship company of the Baldota Group of Companies.

Maharashtra ranks next with 13 blocks auctioned followed by Jharkhand (7) and six each for Madhya Pradesh and Rajasthan.

Mineral auctions in Odisha have hit a wall due to a pending decision by the Union mines ministry to revise mining lease area limits. The tussle between the central mines ministry and the state government has taken a toll on Odisha’s mineral block auctions. No block could be put to online auctions in FY19 as the matter relating to mine lease area cap was enmeshed in litigation. In this fiscal too, the state government despite having readied many blocks, is unable to auction them, pending a decision from the Centre.

Under Section 6(1)(b) of MMDR Act, any leaseholder with 10 square kilometres (km) or more area in its control is debarred from acquiring any more mining lease in a state.

To overcome this restraining clause, the state government had shot off a missive to the Union mines ministry, to revise the area limit to 58 sq km for iron ore and associated minerals. The state government’s argument is premised on the fact that Steel Authority of India Ltd (SAIL), a central sector PSU, possesses approximately 55.01 sq km of mine lease area in Odisha. Besides, 2.77 sq km area has been reserved by the central government for exploration and exploitation through SAIL. It may be noted that mining lease area limits have been expanded to 75 sq km in Jharkhand and 50 sq km in Chhattisgarh.

The Union mines ministry which had previously spurned the state’s request is now vetting the proposal afresh. Also, the ministry has instructed the state government to hold on the auctions process till a decision is worked out.