Mines Ministry agrees to increasing cap of iron ore holdings in Odisha
For iron ore this limit, of 10 sq km, has now been extended to 58 sq km in the state of Odisha, the country's largest iron ore producer.
In a letter to the state government on Saturday, a copy of which ET has seen, the Mines Ministry, has agreed to a six fold increase in area limit for mining grant allowed to an individual lessee. For iron ore this limit, of 10 sq km, has now been extended to 58 sq km in the state of Odisha, the country's largest iron ore producer.
The decision, pending since a year, will now allow Tata Steel to bid for upcoming deposits of iron ore and associated minerals such as manganese.
Uncertainty over this issue had halted auctions of iron ore mines in Odisha where Tata Steel now has not one, but two integrated steel plants. The mineral sector is to make a huge transition in March of next year when 31 working mines (mostly in Odisha) come to the end of their lease terms wiping out 29 per cent of iron ore from the domestic market.
The letter dated 20th September points out that Odisha's total iron ore resources is to the tune of 7558 million (as per 2015 data), with the National Steel Policy 2017's target of 300 million tonne production for steel by 2030, there is greater focus on developing larger mining blocks. "The state of Odisha is the highest iron ore producing state in the country, therefore it requires to boost up production for development of steel and allied industry," it says.
The Mines and Minerals (Development and Regulation) Act requires the Centre's approval for any grant of mining rights that leads to a lessee controlling more than the area cap - in Odisha's case 10 sq km. Rules for auction of mineral resources introduced by an amendment to the Act in 2015 however is silent on the subject.
Naveen Patnaik's government had first sought an increase to 75 sq km to accommodate Tata Steel which already holds mining rights to 49 sq km area. The latter's participation in past auctions had been challenged by rival steelmaker JSW Steel in the High Court of Delhi eventually forcing the Odisha government to withdraw the iron ore deposits in question.
The Centre which had agreed to increasing the cap in neighbouring Jharkhand to 75 sq km had refused to ntertain Odisha's request. The state government later sent a fresh request to the Centre seeking for area limit to be capped, not at 75 sq km, but 48 sq km instead – the total area of iron ore held by Steel Ministry’s PSU, Steel Authority of India.