Odisha miners want early nod after Sail, Tata Steel get leases
Jul 31 2014 , Mumbai
The federation of mining associations of India (Fimi) approached the Supreme Court once again on Wednesday on the delay in approvals. The next hearing on the mining leases is expected on August 19, R K Sharma, president of Fimi told Financial Chronicle.
“Hopefully, the procedure will speed up before the next hearing date on the mining issue. The delay is because Supreme Court had earlier given six months time and the state government may act only when the final date approaches,” Sharma added.
Out of 28 mines, eight have permission to restart mining in the state while the remaining 20 wait.
Tata Steel and Sail, India's top producers, re-started most of the iron ore mines in Odisha after getting new permits in June. One mine of state-owned Odisha Mining Corporation (OMC) has also got approval.
The Supreme Court had on May 16 directed closure of 28 leases whose agreements had expired and directed the state to decide on reopening them within six months. These mines had a cumulative production capacity of about 35 mtpa.
Private miners with small operating capacities said Tata Steel and Sail have been given the licences on the grounds that their operations would be stalled, impacting employees and output of the company. Similarly, many small miners have steel plants and they should also be allowed to resume mining on similar grounds.
Prakash Duvvuri, research head at Ore Team said firm like Mesco Steel, Stemcor, Essel Mining, among others, are the most impacted due to prolonged ban in mining in Odisha. First in line are the captive steel units like Mesco and Aryan, among others, and then the merchant pellet producers, followed by others. The issue of granting the renewals is taking time as the state government undertakes an intense scrutiny of paperwork and relevant clearances, Duvvuri said.
Rita Singh, Mesco Steel chairman and managing director, told Financial Chronicle that the company manufactures around 1.2 million tonnes of steel per annum and mines around 2.5 million tonnes iron ore per annum. “Most of the iron ore mined from our standalone mine is used for our own captive use. We sell very little low-grade ore in the market. While the big players like Sail and Tata Steel have been given permission to start mining on grounds that their operation would get stalled, we are also facing a similar situation and should be granted permission to resume mining.” said Singh.
Singh said that the company has iron ore stock of around 10-12 days to continue with its operations. “We also have around 2,000 employees in our company who would suffer if the plant is shut,” Singh added.
Deepak Kumar Mohanty, Odisha's mines director, said, "There are no deliberate delays but we cannot give an exact timeframe when the permission of the remaining mines would come. We are considering renewal of the remaining mines. For Sail and Tata Steel, these are the captive mines so the approvals were granted fast. For the other mines, most of them are merchant mines so we are considering the renewal of these leases."
Recently, a similar petition has been filed by Indian Metals and Ferro Alloys, Facor Steel, Jindal Stainless Steel and Balasore Alloys that the government of Odisha should give a hearing to the petitioners before granting the renewal of Tata Steel’s third mining licence in Sukinda. The chromite mines of Tata Steel in Sukinda are spread over 406 hectares. Tata Steel has applied for third renewal but other ferro alloys producers (petitioners) have now stepped into the picture citing the reserves of 85 million tonnes as being far in excess of Tata Steel’s requirement for captive consumption. It's requirement was assessed at 16 million tonnes in 1993, when the Supreme Court adopted the Sharma Committee Report and redistributed part of the then 1,261 hectares held by the company to actual users like IMFA/ICCL, Jindal Strips, Ispat Alloys and Facor.
The petitioners pointed out that their requirements have increased as against the granted leasehold area with them. The initial grant of 406 hectares was on the basis of Sharma committee report where the committee made the needs assessment 20 years before.