Decision meant to help steel and aluminum companies facing raw material shortage
The Odisha government has passed a resolution authorising second and subsequent renewal of mining leases of private companies. Such renewals are generally not issued by state governments unless the projects are accepted as being in the interest of mineral development by the Indian Bureau of mines (IBM) at the Centre.
The resolution order, dated October 3, cites the procedure for granting second and subsequent mine leases of the state. The Mines and Minerals (Development and Regulation) Act of 1957, allows for second and subsequent mine leases by a state, provided it satisfies itself fully that such renewal would be in the interest of mineral development. The resolution lays down four pre-conditions for the purpose of identifying and demarcating mineral development projects (see 'Conditions for lease renewal'). These conditions hold good for iron, manganese, chromite and bauxite mine leases held by private companies.
Prerogative of Indian Bureau of Mines
The resolution ostensibly speaks of mineral development but is actually intended to help companies meet their raw material requirement. This is clear from a reading of the resolution. It clearly mentions that the state has signed more than 50 MoUs for establishment of steel plants and alumina refineries which are grappling with issues pertaining to availability of raw materials. “Hence there is a need to authorise second and subsequent mine leases,” the resolution states.
Primarily these renewals are under the domain of the Indian Bureau of Mines. As per the Mineral Concession Rules of 1960, second and subsequent renewal of mines are permitted by the state only after receiving due comments from IBM. IBM comments whether the project qualifies as a mineral development project or not. Generally, IBM replies back on its stand within three months of the submission of application by a state. In case IBM does not reply, the state deems it as a sign of no objection and issues the subsequent renewal order.
But the latest order might encroach on IBM's territory. An official with the Ministry of Mines, on condition of anonymity said:”the resolution is illegal as it cannot be executed without the approval of Ministry of Mines. This is IBM 's domain, maybe the state government is trying to keep discretionary power of allocation/renewal to themselves.”
Rajesh Verma, principal secretary in charge of the steel and mines department of Odisha was not available for comments. His office staff , however, responded, saying, “We are not sure of the allocation process in future, but at present no mine lease renewals have been issued.”
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