Centre clears Roadblock to Auction, Hikes Lease Area Cap to 58 sq km

The ministry has endorsed the state government’s request to revise the ceiling on iron ore and associated minerals from 10 sq km mandated in the Mineral Auction Rules of 2015 to 58 square km. As per the prevailing provisions contained in Auction Rules, any lessee with 10 sq km or more area in its control was not eligible to acquire a new lease. But the relaxation in the mineral lease area limits has offered a breather to integrated steel producer Tata Steel and large standalone merchant mining company- Rungta Mines.

The ministry by invoking powers under sub-section 1 of Section 6 of the Mines and Minerals- Development & Regulation (MMDR) Act of 1957 has enhanced the cap on mining lease area.

The ministry in its notification felt that the area limit needed to be hiked to facilitate supply of iron ore and associated minerals in the interest of the steel industry.

After suitable examination, the ministry found that Odisha’s case for revision was justifiable. The state’s proven iron ore resources are assessed at 7558 million tonnes (mt) as per the National Mineral Inventory published by the Indian Bureau of Mines (IBM). Since the Natinal Steel Policy has envisaged a crude steel output of 300 mt by 2030 and Odisha is tipped to be a key contributor in realising that production, there needs to be ample iron ore back up to fed the expanded capacities of steel mills and also to support the upcoming Greenfield plants.

It may be noted that the central mines ministry in a previous letter in July had asked the state government to disallow bidders who held area in excess of the area limit under Section 6 (1) of the MMDR Act.

In its reply, the Odisha government said the state government had constituted a committee chaired by R K Sharma, additional chief secretary (steel & mines) to consider the case for revising area limits of a mine lessee.

Backing its justification behind the demand to increase limits, the state government cited the example of Steel Authority of India Ltd (SAIL), a central public sector enterprise (CPSE) which is holding an area of 55.01 sq km in mining leases of iron ore and associated minerals in Odisha. Besides this, the central government has reserved an area of 2.77 sq km for exploration and exploitation through SAIL in 2004 by invoking the provisions of Section 17A-1A of the erstwhile Mines and Minerals- Development & Regulation (MMDR) Act of 1957.

Based on the recommendations offered by the committee, the state government requested the Government of India to enhance the area limits for mining leases in the state of Odisha to 58 sq km for iron ore and associated minerals in exercise of powers conferred under provisions to Section 6 (1) (b) of MMDR Act in the development of mineral and industry.