Odisha to resume auctions of iron ore blocks; to offer 11 virgin blocks

Undeterred by the continuing face-off with the Union mines ministry over mineral lease area limits, the Odisha government has decided to revive auctions of iron ore blocks.

A high-level committee of the state government has decided to issue the Notice Inviting Tenders (NITs) for auctions of 11 more virgin blocks on August 16. The proposed roster includes eight iron ore blocks and one each for manganese, graphite and limestone. All the enlisted blocks will be offered as composite licenses-prospecting licenses (PL) cum mining lease (ML).

The freehold blocks lined up for auctions are Narinpanga, Pureibahal, Chandiposhi, Jhumka Pathiriposi, Dholtapahad, Unchabali, Gandhalpada, Rengalbeda North-East, Netrabandha Pahar (West), Kalimati and Uskalvagu.

The second phase of the auction follows the NITs issued on July 31 this year. The tenders were for seven non iron ore blocks. The high level committee had kept in abeyance the decision to open tenders for iron ore blocks.

The decision to defer online auctions of iron ore deposits stemmed from Odisha’s ongoing spat with the Centre. In its latest missive to the state government, the Union mines ministry had made it abundantly clear to the state government to disallow bidders with over 10 square km or more area in their leasehold, at electronic auctions. The Cenre’s directive was in line with Mineral Auction Rules of 2015, framed after the promulgation of the revised Mines and Minerals Development & Regulation (MMDR) Act on January 12, 2015, which killed discretionary award of mineral resources, replacing it with a transparent system of auctions.

Despite the Centre overcoming ambivalence in eligibility criteria of bidders, the Odisha steel & mines department, putatively at the behest of a leading steel company, was intensely pitching for relaxing the cap on mining lease area at 58 square km. 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 holds an area of 55.01 sq km in mining leases of iron ore and associated minerals in Odisha. Apart from 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.

However, with the Centre yet to respond to Odisha’s latest request, the state government has decided to carry forward with the auctions process. Accordingly, it has worked out tentative schedules. A pre-bid conference is to be held on August 28 with technical bids opening on September 23. The preferred bidder is set to be announced on October 22 and November 1. The letter of intent to the successful bidder is proposed to be issued on November 15.