Iron ore mine auctions are gaining pace with three deposits slated to be bid out by the Odisha government by December.
This follows the auction of seven iron ore mines in Karnataka and comes in the backdrop of Centre’s meeting with the state mines ministers to discuss issues impeding auction earlier this month.
The Odisha deposits will be auctioned under the Mines and Minerals (Development and Regulatory) Amendment Act, 2015 (MMDR Act) which allows states to auction mines bearing minerals excluding coal and lignite.
Since the MMDR Act came into effect, 16 blocks have been auctioned across seven states fetching Rs.59,447 crore for state governments over a period of 50 years.
“The total iron ore reserves of the eight blocks auctioned (out of 16) so far stands at 253.772 million tonne (MT). Three more deposits of iron ore in Odisha are likely to be auctioned by December,” said a senior government official on condition of anonymity.
The deposits to be put up for auction include Kalmong iron ore block wherein drilling work finished in August and geological report is due this month.
“Also, geological report for Netrabandha block is due this month, after which the block may be put up for auction,” said another government official who also did not want to be named.
The third block is Mendhamurani, the second official added.
India wants to expedite mineral exploration process and production of key minerals, as the ministry of mines aims to raise annual mineral production by 21-22% till 2020 to add one percentage point to the country’s gross domestic product (GDP). The Bharatiya Janata Party-led government is credited with setting up a template for natural resource allocation through coal block auctions, which is now being followed for other minerals.
At present, the sector contributes 2-2.5% to India’s GDP. The government is projecting a GDP growth of 7-7.75% in the current financial year.
Production of iron ore, required in the steel-making process, is expected to increase further as there is a long list of mines to be auctioned in the near future.
“A total of 27 ‘C’ category iron ore mines have been identified in Karnataka which are to be auctioned in four phases, subject to the approval of the apex court,” said a third government official requesting anonymity, adding that timeline for phase 2 is October 2016 and that for phase 3 is February.
The mines, referred to as category C mines, are primarily located in Bellary and Chitradurga districts. The apex court had cancelled the leases of 51 iron ore mines in the state in April 2013 wherein it found massive irregularities in terms of environment degradation. These mines were then classified as category C mines by the Supreme Court-appointed Central Empowered Committee.
State-owned Geological Survey of India (GSI) and Mineral Exploration Corp. Ltd (MECL) are likely to complete exploration of five and two unexplored iron ore mines respectively in Karnataka by December.
“These mines can be put up for auction by June 2017,” said the third official quoted above.
Queries emailed to the spokespersons of the ministry of mines, department of mines and geology in Odisha and Karnataka, GSI and MECL on 17 October remained unanswered.
Experts believe steelmakers will be interested in the auctions.
“Definitely, there will be takers for these iron ore mines as many entities don’t have captive mines,” said S.K. Roongta, former chairman and managing director of Steel Authority of India Ltd.
India’s mineral production during the first quarter of the current financial year was up 14% to 138.53 MT compared with 121.11 MT during the corresponding period last year. Iron ore production during July grew marginally to 11.5 MT.
Source:VCCircle