Delay in new leases hits ore miners

The delay in granting fresh leases to mine iron ore has hit the expansion plans of mining companies, both in the private sector and the public sector.

Litigation and political interference in granting fresh leases are said to be the main reasons for the delay in Jharkhand, Chhattisgarh, Karnataka, Orissa and Goa, which account for the bulk of the proven iron ore reserves (13,912 million tonnes) in the country.

"Only a few mining companies have been granted fresh iron ore leases in recent years. Close to 1,000 applications for fresh mining leases are still pending before various state governments. This has badly hit the expansion plans of major mining companies," said S B Chauhan, adviser to the Federation of Indian Mineral Industries (FIMI).

The country's top two iron ore exporters from the private sector, Sesa Goa and Mineral Sales Private (MSPL), and public sector undertaking Kudremukh Iron Ore Company (KIOCL) are some of the companies whose applications for fresh mining leases are pending approval.

According to Chauhan, Orissa has not issued a fresh mining lease in the last five years. Similarly, Karnataka has frozen the processing of applications for fresh leases for the last 18 months.

It takes from one to three years for a state government to grant a fresh mining lease, which involves clearances from the forest department, revenue department and environment and ecology department. Subsequently, the Centre has to sanction concurrence.

"It is a time-consuming process. We have urged the Centre to streamline the process. The Anwarul Hooda Committee has recommended reforms in granting mining leases. Unfortunately, there is no progress in implementing the recommendations," Chauhan said.

Applications for fresh mining leases from Sesa Goa, MSPL and KIOCL are pending approval in Karnataka. However, they are unlikely to be processed quickly. The Karnataka government has constituted a judicial commission to examine allegations of nepotism in granting mining leases.

The commission sought an extension of its term to complete investigations. However, the extension was not granted after names of Chief Minister H D Kumaraswamy's relatives surfaced in the 'beneficiaries list'. "The government has issued clear instructions not to grant fresh lease till all issues concerned have been settled," Karnataka officials said.

KIOCL is the worst hit. The company, which had to shut its mining operations a year ago in the ecologically sensitive Kudremukh bio-reserve in the Western Ghats (Karnataka), following a directive from the Supreme Court, is relying on supplies from the National Mineral Development Corporation. The 100 per cent export-oriented company operates a pellet plant in Mangalore.

The company has applied for mining leases in the Kumaraswamy hill range in the iron ore-rich Bellary district of Karnataka. It had applied for a prospecting license in Khandadhar iron ore mines in Keonjhar district (Orissa).

However, the Orissa government is in favour of handing over the Khandadhar area to the South Korean steel giant Posco. KIOCL has questioned this in the court.