By Bizodisha Bureau, Bhubaneswar, December 6, 2018: Even as Odisha government has begun preparation to put up 16 mines including ten iron ore mines and six others, for auction by the end March next year, uncertainty over the maximum permissible area that can be granted for mining could jeopardise the move.

Odisha steel and mines minister, Prafulla Kumar Mallick said, “16 mines are ready for auctions by March end. If the Centre approves, we will lease them despite court’s stay order.”

The union mines ministry is holding over the state’s request to increase the maximum permissible mining area for a mineral block allocated through auction from 10 km2 to 75 km2.

Officials here said that in the absence of a clear directive from the Mines Ministry on the issue, any further auction to allocate mineral blocks will risk legal challenge and such risks could also impact the response from prospective bidders.

Earlier this year a court stayed the results of a round of auction of two iron ore blocks maintaining that the central government needed to come out with a decision on maximum permissible area for mining in response to the state government’s request seeking the extension of the maximum permissible mining limit.

The Mines, Minerals Development and Regulation Act 2015 stipulated that maximum mining rights for a mineral block secured through auction would be 10 km. Should any state want an extension of such permissible limits, the government will have to seek approval of the union mines ministry, which could grant extensions on a case-by-case basis.

The Odisha government maintains that unless the permissible mining area limit is increased, the proposed auction will not be able to attract interest from large mining or metal processing companies. The government has cited the examples of Tata Steel and Steel Authority of India Limited, which already operates mines in the state with a combined lease area of more than 50 km2.