The Odisha Cabinet on Monday decided to dispose off all major mineral leases, captive and non-captive, except coal, through auction. It could add Rs 10,000 crore annually to the state exchequer.
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 reopeing after their closure on the basis of the Supreme Court order in May last year.
The court, in its interim order, held that operations of such leases are illegal unless the state government passed express orders under Section 8 (3) of the Mines and Minerals- Development & Regulation Act (MMDR), 1957.
“The state Cabinet has taken a historic decision to auction all mineral leases, both captive and non-captive, barring coal. The auction will be made applicable to all leases awaiting second and subsequent renewal,” said Parliamentary Affairs Minister Bikram K Arukh after the Cabinet meeting.
The leasing of major minerals will be done through public auction after obtaining leave of the Supreme Court by filing a petition.
Chief secretary G C Pati said, “The modalities for the auction will be worked out by a high-level committee to be chaired by the development commissioner. The auction will not be applicable to the eight iron ore and manganese mines for which the state government has already passed express orders pending renewal of their leases.”
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 on auction will not be applicable to all the existing leases of state-run miner Odisha Mining Corporation 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 license (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 MMDR Act. The exact ceiling would be decided after the modalities are worked out by the committee.
The Cabinet decision is expected to generate more revenue, create job avenues, attract investments for large, medium and small mineral based industries and facilitate ancillary and downstream industries.