The mines ministry will by the end of July issue notices inviting tenders (NITs) to auction 48 operating non-captive iron and manganese ore mines whose leases will expire in March 2020. The move will benefit steelmakers such as JSW Steel and Rashtriya Ispat Nigam (RINL) which have been fearing disruptions in supply of the key raw material.
Cumulatively, these mines annually produce around 45 million tonne of both the raw materials, mostly iron ore. Half of these mines are located in Odisha, six each in Jharkhand and Karnataka, five in Gujarat, three in Andhra Pradesh, two in Rajasthan and one each in Himachal Pradesh and Madhya Pradesh.
As per the provisions of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, the lease period for merchant miners, totalling 329, are set to be expired in March 2020. Around 281 of these merchant mines are non-working ones.
In order to facilitate auction of the working mines even before the expiry of leases, the government has already brought in an amendment to the Mineral Concession and Development Rules (MCDR) in March last year, mandating existing lessees to complete G2 level of exploration to establish main geological features of a deposit over the entire mineralised area before April 2019.
We have also initiated talks with the environment and forest ministry to allow continuation of mining operations for these mines beyond March for the new owner with initial approvals. Formal environment and forest clearances can come later, said a mines ministry official.
The mines ministry has already formed a committee to look into the post-auction issues related to transition from the old to the new lessee and has mandated the committee to prepare a draft guideline.
However, an industry veteran said the extant law grants a lessee a total of seven months after the expiry of the lease to remove any ore mineral excavated during the lease period and the plant and machinery. Any move to force them out early will lead to litigation and chaos and disruption of raw material supplies to steel plants.