BHUBANESWAR: After a long wait of over two years for a favorable metal market and a recent push from the Central Government, the State Government has finally given the green light to auction 10 mineral blocks, including iron and manganese ore.
The government has approved auctioning four iron ore mines in the Sundargarh and Keonjhar districts. These are the Koira mine in Sundargarh, and the Roida-1, Putulipani, and Jalahuri mine in Keonjhar, whose lease periods expired in 2021. Additionally, a new iron ore mine at Jhumka-Pathiriposhi West in Sundargarh is up for grabs.
Three mineral blocks with a mix of iron ore and manganese deposits in the Sundargarh and Keonjhar districts are also on the list. Moreover, the government has okayed the auction of two new bauxite blocks in Kalahandi and Rayagada districts.
Despite being in power for over seven months, the BJP government hesitated to go ahead with e-auctions due to low metal prices, fearing a lack of interest from bidders resulting in lower revenue for the state.
Sources in the mining industry suggest that the decision to auction 10 mineral blocks, including two new bauxite mines in a challenging market, was likely driven by pressure from Union Mines Minister G Kishan Reddy. During his recent visit, he discussed the matter with Chief Minister Mohan Charan Majhi.
Odisha, like other mineral-rich states, has been reluctant to hold auctions fearing very low bids, which could lead to long-term revenue loss. The government sets floor prices for auctions based on its fair value assessment of the mines. However, bidders might perceive the value to be lower than the government’s estimate.
Since the auction regime was established following amendments to the Mines and Minerals (Development and Regulation) Act in 2015, the mining industry has significantly boosted the state’s economy, with revenue now 10 times higher than a decade ago.
For instance, Jindal Steel and Power Ltd (JSPL) secured the Kasia iron ore and dolomite block in Keonjhar by offering a premium of 118.1% over the floor price of 95.6%. The Guali iron ore block received the highest premium of 144% from JSPL, although they later refused to sign the lease agreement.
