Indian steel companies oppose miners seeking extension of expiring leases of iron ore mines

Wednesday, 05 June 2019 10:06:55 (GMT+3)   |   Kolkata

Taking an opposing stance of miners, Indian steel companies have petitioned the government seeking immediate auction of 35 operational iron ore mines where mining leases were scheduled to expire in March 2020, a government official said on Wednesday, June 5.

The official said that the Indian steel companies in representations made to NITI Aagyog (National Institute for Transformation of India Commission) a government policy advisory body, have cautioned that fresh auction should be held immediately for the 35 operational mines accounting for an estimated 55 million mt of production per year as any delay beyond March 2020 will force closure of these mines and raw material supply disruptions to domestic steel mills.

This was in contrast to submissions made by Federation of Indian Mineral Industries (FIMI), the representative body of miners, that mining leases expiring of the 35 mines should be granted extension for a period of 10 years until 2030 and thereafter for another 20 years until 2050 or until reserves lasts, the official said.

These iron ore mines are part of 334 mining leases that are scheduled to expire in March 2020. The Mines, Mineral Development and Regulation Act  (MMDRA) 2015 had made auction mandatory for allocation of mining leases and since these 334 mines were allocated prior to 2015 and leased slated to expire next year, fresh auction was required for grant of new mining leases.

The steel companies have pointed out that if extensions are to be granted to existing mining lease holders beyond March 2020, the government will lose significant revenues in terms of auction premiums and will be in violation of MMDRA which made auction mandatory for allocation of mining leases.

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