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Centre, Odisha face off on lease extension of mines

CM against giving grace lease period to mines completing 50 years

BS Reporter  |  Bhubaneswar 

Odisha chief minister Naveen Patnaik today urged the Centre not to extend validity of mining leases which have completed 50 years even as the Union Mines ministry has asked the state government to take decision on renewal of lease terms of these mines as per the transitional grace period allowed under the new mining ordinance.

"I stated that no extension be given to mining leases that have completed 50 years, which may be settled afresh through auction," said Patnaik, after the first meeting of National Institution for Transforming India (NITI) Aayog at New Delhi.

Meanwhile, in a letter to the state chief secretary, the Union Mines ministry has asked the state government to take decision on granting grace lease period to the mines whose lease terms had expired after fifty years by February 28 under section 5 and 6 of clause 8A of the Mining Ordinance.

The relevant clause of the ordinance has allowed automatic lease extension of captive and non-captive merchant mines, whose lease validity had lapsed, upto 2030 and 2020 respectively before they are put on the block for auction. The decision to allow operation of 18 lapsed leases includes one captive mine of Tata Steel. All these mines have completed 50 years' operation after lease grant and still have a combined deposit of 30 million tonne left in them.

The Centre and the state government have been at loggerheads ever since the Mines and Mineral Development and Regulation (MMDR) Amendment Ordinance 2015 came into effect last month over this issue. The state government has opposed the automatic lease extension clause of the ordinance vehemently.

Before the promulgation of the ordinance, the state government had decided to auction these mines.

The state government had estimated Rs 5000 crore as revenue from auctioning of the mines.Even in a recently concluded workshop at Bhubaneswar conducted by the Union Mines ministry to clarify provisions of MMDR act, the state mines director had demanded that the government be given the authority to determine the eligibility for extension of validity of such leases.

Though the central government has not responded to the state's plea, the matter is likely to come up at the Supreme Court hearing on the lapsed mining leases in the state later this month when the state will submit its report on the action taken by it on the basis of apex court's order on May 16, 2014.

In the NITI Ayog meeting, Patnaik reiterated demand to empower states for levy of a green tax on mining firms.

"I demand imposition of green tax to compensate the pollution caused by mining in Odisha," he said.

The central government in the meeting today invited suggestions of chief ministers to design programmes and schemes as per their need. Patnaik demanded more resource allocation for Odisha for construction of national highways, rail lines and irrigation facilities in the state and said the Centre must keep in mind the heavy losses suffered by Odisha by frequent calamities while allocating financial resources.

He also demanded that the Vizag-Chennai industrial corridor be extended till Balasore. Patnaik said, the state will actively take part in the Central government schemes such as 'Make in India', Skill India and housing for all.

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First Published: Sun, February 08 2015. 20:34 IST