By Sadananda Mohapatra
Bhubaneswar, August 23 (LocalWire): The delay in approval by the central government on relaxing the maximum mining area limit as sought by the state is likely to hold up the auction of mines in Odisha, particularly whose lease is set to expire on 31 March 2020.
Delays in the auction may result in the state missing the deadline of December 2019 to complete the process as prescribed by the central government, an industry source said.
The state government has already postponed the auction process twice since the centre is yet to give its nod over auction rules.
The central government had issued guidelines to all the mineral-bearing states to complete the auction process and handing over necessary documents to the new bidder by end of this year so that the new lessee can take over and start operations without delays due to the expiry of the existing mines lease agreements.
The deadline was fixed to ensure smooth transitioning of lease handover process without affecting the mineral production.
While Odisha is the biggest iron ore producer in India, the state government has not been unable to conduct the auction of key mines pending the approval from the central government on the relaxation of land area limit for iron ore mine lease auction.
The state government had decided to begin the auction process in June this year after a one-year delay. In the last fiscal, Odisha could not auction even a single mines block due to pending litigation over the eligibility norms for the participation of a bidder with more than 10 square km in its leasehold.
In the current financial year, the state has plans to auction 40 mineral blocks online. The blocks include 16 iron ore mines, with an approved capacity to produce 79 million tonnes of iron ore per annum.
The possible delay in the fresh auction and expiry of the existing leases in March next year has also triggered concerns of raw material crunch that might affect the end-user industries, especially the non-integrated steel producers operating without captive mines.