By Bizodisha Bureau, Bhubaneswar, September 20, 2019: Decks are cleared for Tata Steel to participate in upcoming auction for iron ore with the Centre belatedly agreeing to increase an area cap for iron ore mines to 58 square kilometers in Odisha, the country’s largest iron ore producer.

By invoking sub-section (1) of Section 6 of the Mines and Minerals Development & Regulation (MMDR) Act of 1957, the Mines ministry has hiked the area limit of mining lease in respect of iron ore and associated minerals to the extent of 58 sq km in Odisha, officials said.
The decision, pending since a year, will now allow Tata Steel to bid for upcoming deposits of iron ore and associated minerals such as manganese.

The ministry said the mining lease area limit needed to be enhanced to facilitate supply of iron ore and associated minerals in the interest of development of the steel industry.

The ministry also took note of Odisha’s role in the future to help the country reach its envisaged crude steel production target of 300 mt by 2030.

Quoting figures from the National Mineral Inventory 2015 published by the Indian Bureau of Mines (IBM), the ministry said the total iron ore resources in the state have been assessed at 7558 mt.

“From the point of view of scientific mining and mineral blocks, there is more focus on larger mining blocks. National Steel Policy, 2017 has targeted the steel production of the country to the tune of mt per annum by 2030. The state is the highest iron ore producing state in the country, therefore it requires to boost up production for the development of steel and allied industry,” Veena Kumari Dermal, director, Union mines ministry noted in the order.

The Union mines ministry which had previously rejected the state’s request vetted the proposal afresh. Also, the ministry had instructed the state government to hold on the auctions process till a decision was worked out.

No block could be put to online auctions in FY19 following the tussle between the central mines ministry and the state government. In this fiscal too, the state government despite having readied many iron ore blocks, was unable to auction them, pending a decision from the Centre.

The Mines and Minerals (Development and Regulation) Act requires the Centre’s approval for any grant of mining rights that leads to a lessee controlling more than the area cap – in Odisha’s case 10 sq km. Rules for auction of mineral resources introduced by an amendment to the Act in 2015 however is silent on the subject.