Bhubaneswar: Mineral-based industries on Thursday sought concrete steps by the Odisha government for transfer of existing statutory clearances to successful bidders in the auction of iron ore and other mines to prevent scarcity of raw materials and disruption of production after March 2020 when the lease of many mines will lapse.
The state government should also take immediate steps to ensure early completion of rail and road projects and strengthen logistics which can cut transportation cost by up to 40 per cent, industry leaders told reporters at the end of a two-day conclave organised by Indian Chambers of Commerce (ICC).
As per the MMDR Amendment in 2015, the leases which have completed period of 50 years or more will lapse on March 31, 2020 and in Odisha 21 operating iron ore mines with capacity of 80 mtpa are lapsing that day, Manish Kharbanda, Convenor of Steel and Mines Committee of ICC Odisha state Council said.
He said the balance 45 mtpa mine capacity operating beyond 2020 will not be sufficient to meet the domestic requirement and production in industries will be hit hard unless pro-active actions are taken by the government.
Even though the state government has promised to complete mining auction process on time to ensure uninterrupted supply of iron ore and other minerals, tender document of 20 operating iron ore and manganese mines put for auction leaves ambiguity on transfer of clearances, valuation of stocks and mine infrastructure and continuity of employment of people engaged, Kharbanda said.
As per tender document, the timeline prescribed for obtaining clearances is 2.6 years from LOI and 2 years to resume production which would result in huge demand-supply imbalance for a long time, he said adding it will take two to three years for the successful bidder to get fresh environment and forest clearances and bring production to a halt.
Therefore, the state government should seriously pursue the matter with the centre to ensure transfer of these statutory clearances to the successful bidder in auction so that production continues uninterrupted and there is no disruption in supply of raw material to downstream industries from these mines, he said.
Both the state and central governments should ensure smooth transition of forest clearance (FC) and environmental clearance (EC) post-mineral block auction process, he said.
Citing an example, Kharbanda said there is provision of transfer of existing statutory clearances to the successful bidder as per an order of the Supreme Court in July 2015 relating to auction of iron ore blocks in Karnataka.
The same principle may be adopted in case of Odisha to ensure continuity in production and prevent any disruption.
This apart, the government should also take appropriate steps to keep non-serious players out of the process, he said.
ICC was also of the view that the same rule should be followed for non-coal blocks like auction of coal blocks where net worth of a company has been taken into consideration.
If government allows same company to participate multiple times in the auction process and that company gets a few mines but due to low net worth it fails to develop the mines in a stipulated time frame. There are also chances that low net worth company may go bankrupt, he said.
On mineral exploration, Kharbanda said only ten per cent available minerals in the country has been explored, while there is a huge scope for exploration ramp up. Beneficiation is another area where mining industry can give more emphasis and focus.
The conclave also expressed the hope that state government will take steps so that latest technologies are adopted by its Odisha Mineral Exploration Ltd.
The ICC conclave also noted that India produces 150 million tonnes of low-grade minerals out of which 80 million tonne is produced only in Odisha.
"If we are able to add values to these minerals, then iron ore shortage will get over in a few years," Kharbanda said.
On transportation of minerals, the ICC viewed that logistics cost in Odisha is very high in range of 25 per cent to 30 per cent. Transport tariff for steel and steel-related products should be reduced and government can help by holding talks with various stakeholders to improve this which directly help in making domestic industries cost-competitive.
"Waterways transportation and slurry pipelines are few more ideas on which he discussed compressively," Kharbanda said.
On technology, ICC suggested that mining industry can use various digital ideas like drone and telemetric tech to increase efficiency in operation.
ICC also requested the government to consider participation of mining companies in district level District Mineral Foundation (DMF) committees and said the government should address the local challenges owing to blockades, strikes and restrictions on movement of mineral transporting vehicles.
Other officials of ICC, who spoke in the press meet were Chairman of ICC Odisha state Council M C Thomas and Co-chairman J B Pany.