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Odisha government gears up to auction 30 mineral blocks next month

Nine freehold, 21 lapsing merchant mines to be auctioned

Coal likely to remain in short supply until 2024: CIL tells govt

Odisha, the largest producer of iron ore is ready to auction iron ore and associated mineral blocks after the Union mines ministry recently approved the cap in mining lease area limits to 58 square kilometers (sq km) in the state.

Though the state government had cleared nine virgin mineral blocks for electronic auctions last month, the process had to be paused as the mines ministry had called for putting auctions on hold pending a decision on revising mine lease area limits. Earlier, the ministry had relaxed the cap on mine lease area to 75 sq km in Jharkhand and 50 sq km in Chhattisgarh.

Apart from the nine freehold blocks, 21 out of 22 merchant mines whose validity ceases by March 31, 2020 will also be put to online auctions. The state government has set an internal target to complete the auction related formalities in respect of 40 mineral blocks by December this year.

"We will issue Notice Inviting Tenders (NITs) for both freehold and lapsing merchant leases in two phases on October 4 and 14. We expect a good response to our mineral blocks as a number of bidders will be in the auctions fray," said an official source.

Odisha has 24 merchant mines whose lease tenure ends by March 2020. Out of the 24 mines, NITs have been issued for two chromite mines currently under the leasehold of BC Mohanty and Misrilal Mines. Around 30 bidders including Tata Steel, JSW Steel, Indian Metals & Ferro Alloys Ltd (IMFA) and Adani Group have submitted technical bids for the two chromite resources. One merchant chromite mine under Tata Steel's leasehold is proposed to be reserved for an Odisha government owned PSU.

Of the balance 21 leases headed for auctions, 10 are iron ore mines, four manganese, one chromite lease and seven mines with co-existence of iron and manganese ore deposits. Leases operated by big merchant miners like Essel Mining & Industries Ltd, Rungta Mines, KJS Ahluwalia and  Sirajuddin & Company are set to be auctioned.

Since one of the mines in KJS Ahluwalia's leasehold has 792.93 million tonnes (mt) of iron ore reserves and auction of this block with immense reserves may not attract a lot of bidders due to high net worth requirement, a technical committee of the state government is  examining the feasibility to split it into three blocks.

The reserve prices for both iron ore and manganese blocks has been pegged at 10 per cent of the sale value. Three mineral blocks- Jajang iron ore block held by Rungta Mines, Essel Mining's Jilling-Longlata block and Jurudi iron ore lease of Kalinga Mining Corporation have been proposed to be reserved for end use industries during the ensuing phase of auctions.