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The auction of ‘C’ category mines in Karnataka is likely to be delayed further, with the Supreme Court asking the state government for details on iron ore reserves in those mines before proceeding.
The Karnataka government had asked the apex court to give its approval to conduct auction for six mines for the ‘C’ category in the first phase and another nine mines in the second phase as the assessment of ore left in the nine mines was yet to be ascertained. While pulling up the Karnataka government over “laxity” in ascertaining the iron ore reserves in the state, the apex court last week directed the state government to inform it on or before April 10 on the mineral reserves position in the nine mining leases. The court, in its order on 18 April 2013 had directed for the cancellation of 51 mines under the “C” category and re-allotment of the same to end users through a transparent auction process.
The state government has entrusted the task of ascertaining the left over mining reserves in these mines to state-owned Mineral Exploration Corporation Limited (MECL). The MECL has till now submitted report for only six mines and the work for remaining nine mines is expected to be completed by June this year.
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“The assessment of iron ore reserves is a highly technical and specialised job and it has to be done as per the United Nations Framework Classification (UNFC). Though MECL has the expertise to do this job, the equipment it uses are very old and it is difficult to ascertain accurate data. It would be better if the government engages companies from Canada or Australia, which have the latest technology,” Basant Poddar, senior vice-president, Federation of Indian Mineral Industries (FIMI), said.
He added the MECL should tie up with a foreign company to conduct the scientific drilling to assess the mineral reserves. “This job cannot be done in a hurry and it requires at least six months. In our opinion, the auction of “C” category mines will take at least one year’s time.”
There are no proper roads to move around in the mining areas and if monsoon starts in June, it would be difficult to conduct the study, which means the process would get delayed, Poddar said.
“We will file our affidavit in the Supreme Court very soon,” Tushar Girinath, secretary, department of mines, said.
The Karnataka government had identified 15 mines out of the 51 of the cancelled “C” category mines for auction. According to old estimates, these 15 mines could produce around 5-6 million tonnes of iron ore per annum. As the amended Mines and Minerals (Development and Regulation) Act, 2015 recommends scientific assessment of reserves, the UNFC method has to be adopted for assessing them and this will take more time.
The state government was preparing to auction six mines, for which the assessment was done in December last year. As the court has not said anything on the auction of these mines, the entire process of auction of “C” category mines will be delayed further, analysts tracking the sector said.
The court has posted the matter for hearing on April 21.
