Tata Steel has halted chromite mine operation at Sukinda as its lease validity expired earlier this month. Even though the company had the option to operate the mine invoking the 'deemed extension' clause mentioned in the mineral concession rules (MCR), it could not do so due to unavailability of forest clearances.
"Tata Steel has applied for a temporary working permit to the Ministry of Environment and Forest (MoEF) to operate the mine. It has submitted the amount towards NPV (Net Present Value) of trees as required by law to avail the forest clearances”, said U C Jena, deputy director of mines of Jajpur Road mines circle, under whose jurisdiction Sukinda area falls.
The Sukinda chromite mine covers 406 hectares area, including 106 acres of forest land. The lease validity, which was valid for 20 years, expired on January 11. The mine has the capacity to produce 2.4 million tonnes (mt) of chrome ore every year.
A company source said, they hope to get the temporary working permit within two weeks and hence, the mines operation should start by the second week of February under deemed extension clause.
The mines lease renewal process normally takes much longer time, sometimes over ten years due to lengthy bureaucratic process. Therefore the MCR provides that if a mining company has applied for renewal of lease deed one year before the expiry date, then they will be allowed to operate the mine under deemed extension clause even if their lease is not renewed in time.
Even if Tata Steel is able to operate the mine under this special provision, it has to curb production significantly as per a recent mandate of the state government.
The state government, through a resolution in October 2012, ordered that miners working under deemed extension clause have to limit mineral production only to the extent of their captive need till the renewal of mining lease.
"As per the resolution, Tata Steel has to minimise output by as much as 60 per of its monthly capacity”, said an official source.
Chrome ore, after its upgradation to ferrochrome, is blended with hot iron metal to produce stainless steel. Tata Steel was producing chrome ore beyond its captive requirement and had entered into agreements with many ferrochrome makers to convert the mineral for exports.