Herald: E-auction of dumped ore is attempt to clutch at straws

E-auction of dumped ore is attempt to clutch at straws

22 May 2019 05:53am IST
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22 May 2019 05:53am IST

Revenue from sale of iron ore is what may bring about a balance to the State’s financial accounts, as the proposed e-auction of the ore lying dumped outside lease areas in forest, agricultural and government land, has the potential to earn in lakhs of crores for the State.

This is one of the measures that the State government is looking at to recommence operations in the mining sector. While the financial windfall would be welcome by the treasury, this would also lead to clearning up the dumps from agricultural and forest land, that would allow this land to be reused for the purpose it was meant to be utilised. 

That e-auction, however, won’t be achieved easily or quickly. The contention of the government is that the dumps outside the lease area belong to the State as the ore was illegally dumped there. The amount of iron ore in these dumps totals 733 million tonnes, which is a huge quantity and worth a large amount of money. The government can succeed only if the holders of the mining leases who dumped this ore outside the lease areas give up their rights to the mineral, without a fight. For the time being, the lease holders are saying nothing, preferring instead to await the policy on this that has been promised by July. Besides, the government will have to obtain an Environmental Clearance from the Union Ministry of Environment and Forest (MoEF) to handle these dumps lying in forest areas.

Mining operations have been at a halt since March 2018, after the Supreme Court scrapped second renewals to 88 lease holders. Since then the government has made sporadic and unsure attempts to restart operations, as mining dependents protested and even travelled to New Delhi with their demands. Except for the dependents gaining assurances and reassurances that the issue would be considered within the ambit of the law, there has been no othere action. This new attempt to auction the ore dumped outside lease areas and start some activity in the sector, would not lead to restarting extraction, but merely clearing the dumps and then transporting the ore by trucks and barges to the port for onward journey. 

While this will result in some minor activity, the entire project also depends on there being buyers for the iron ore that has been dumped. As the Chief Minister himself has cautioned, much of the ore could possibly be of a poor grade, with just some of it of 55Fe or above. The past e-auctions of ore lying in jetties that the government has been irregularly conducting, has sold just 11.1 million tonnes through 21 e-auctions of the 15.5 million tonnes of ore identified. The first e-auction took place in 2014 and the process was halted in April 2017, following a poor response from the bidders. What is the guarantee that the ore in the dumps outside lease areas will not meet a similar response from buyers? The ore in these dumps may have been quantified, but it still remains to be analysed for its quality. Until that is done, this proposal too remains merely a possibility to be considered. 

The serious thought process that is required to restart mining operations in the State has been consistently absent. The government has been merely toying with the sector, ignoring also the process to recover the mining losses due to illegal operations. In the past years, the mining sector has been on a continuous slide, earning precious little for the State, and the recovery of monies would have helped. The process to start mining orperations cannot be initiated unless the leases are auctioned so that the State earns the maximum. Renewing leases, is not an option.

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