The Indian government has not acceded to the proposal of the government of the state of Odisha for a relaxation of the cap on the mining leasehold area of a steel company, Odisha government officials said on Thursday, June 14.
The officials said that the Odisha government has sought that the cap on the iron ore leasehold area that a steel company can hold for captive mining be increased from 10 km² to 75 km² to ensure larger participation of steel companies at auction of new iron ore blocks scheduled by the government in the current fiscal year.
However, the Indian government has not agreed to approve such a relaxation which in turn could be interpreted as meaning that steel companies like Tata Steel and Steel Authority of India Limited (SAIL) which operate legacy captive iron ore mines spanning hundreds of square kilometers in the region would not be able to participate in forthcoming auctions, the officials added.
Under the circumstances, the existing 10 km² cap on the leasehold area would have remained in the auction bid conditions, the officials said.
However, they acknowledged that there is not any official indication that companies like Tata Steel and SAIL would participate at the forthcoming auction, while their absence from the bidding would enable other steel companies which do not have captive mines to have a better chance to secure captive raw material sources.
