Mining operations resume as government renews leases in Odisha, India

2 June 2014 (Last Updated June 2nd, 2014 18:30)

Mining operations have resumed in the Odisha state of India after the regional government renewed the leases of some of the iron ore mines of Steel Authority of India (SAIL), Tata Steel and Odisha Mining.

Mining operations have resumed in the Odisha state of India after the regional government renewed the leases of some of the iron ore mines of Steel Authority of India (SAIL), Tata Steel and Odisha Mining.

On 16 May, the Supreme Court had asked the Odisha Government to halt operations at 26 mines that had not renewed their extraction leases and ordered them to renew within six months.

According to Odisha Government mines secretary G Srinivas, eight mines, which have an annual combined capacity of 20 million metric tonnes (Mmt), have received new mining leases and have resumed ore extraction.

"The re-started mines constitute two thirds of the capacity suspended by the court."

Among the eight mines are four of Tata Steel, three of SAIL and one of state-owned Orissa Mining. Another five mines of Tata Steel are expected to get approval this week.

Despite resuming operations, the temporary halt will result in a 25% shortage of iron ore supply in June.

The Institute for Steel Development and Growth director general Sushim Banerjee was quoted by The Hindu Business Line as saying that the supply shortage could be in the range of 3Mt to 4Mt, given the normal monthly demand of 10Mt to 12Mt.

Srinivas said the government has ensured that the biggest mines have started the process and this will improve supplies.

"The re-started mines constitute two thirds of the capacity suspended by the court," Srinivas added.

Meanwhile, Odisha Government mines state director Deepak Mohanty said the temporary closure of the mines would not affect the revenue in the form of mining royalty.

"The brief halt in operations will not have much of an impact on the yearly output and we hope the revenue generation will be steady," Mohanty said.

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