The closure of 26 iron ore mines in Odisha by a Supreme Court order last week, which stated that they can resume production only when the state government renews leases, would affect Tata Steel and SAIL?s Rourkela and Durgapur plants.
While the Barsuan and Kalta mines supplied iron ore to the Rourkela steel plant, the Bolani mines fed the Durgapur plant. Tata Steel’s plant at Jamshedpur sources iron ore from Joda East and other mines in Odisha. These are captive mines of the two steel firms. Currently, these plants have iron ore stock for 15-20 days.
Apart from the two integrated steel producers, a number of sponge iron and small steel plants in the state and other states would also face a raw
material crunch due to the closure of the standalone mines of Essel Mining and other private companies.
However, the Odisha government has started the process of disposing of the mining lease renewal (MLR) applications of the 26 mines pending before it on priority basis following the apex court’s order, which has asked them to dispose of the applications in six months.
“We have recommended the state government to take in-principle initiatives in disposing of the 26 MLR applications on priority basis and it has started the process,? state mines director Deepak Mohanty said.
According to him, the process would be completed within the six months? time give by court.
However, BK Mohanty, advisor to the Society of Geo-scientists and Allied Technocrats (SGAT), an apex body of mining professionals, is of the view that the process of renewal cannot be completed in six months as it also requires prior approval of the central government.
The closed mines produce 30-40 million tonne of ore per annum. The affected mines are Khandabandh, Katamati, Joda East, Joda West, Bamebari, Manmore, Guruda and Tiringpahar of Tata Steel, Bolani, Kalta and Barsuan of SAIL, Belkundi and Bagiaburu M-block of Odisha Minerals Development Company, Jurudi of Kalinga Mining Corporation, Jilling-Langalota of Essel Mining and Industries, Jaribahal of Patnaik Minerals and Naugaon of KJS Ahluwalia.
Odisha has a total of 56 iron ore mines, of which 16 have all renewals in place and can function normally. Of the remaining 40, 14 can function because they are under deemed extension for the first time since grant of lease which is permissible under law.
The 26 mines which cannot mine now and need to secure fresh lease extensions are on deemed extension for the second time since their original lease expired, which is not permissible under law.
