Orissa's bid to reopen mines faces legal challenge

The Indian provincial government of Orissa’s bid to renew mining leases through the auction route has hit a roadblock with courts preventing the government from taking any final decision before the legal challenge is heard.

After a preliminary hearing, the Orissa High Court passed an interim order that the auctions process for the renewal of mining leases should be kept in abeyance and sought replies from the Orissa government on the legal challenge.

The Orissa government on January 5 passed an executive order proposing to resort to auctioning for all new mining leases and those pending for second or subsequent renewals, barring the case of coal blocks.

As reported by Mining Weekly, the provincial government had sought to reopen 18 iron-ore and manganese mines which had been shut down following a Supreme Court verdict which held that mines without valid renewals could not operate until such time that pending renewals of mining leases were formalised by the government.

The decision of the provincial government would have ensured maximum revenues as well as transparency in the allocation process, which would not otherwise have been possible through the process of clearing pending renewals of mining licences of existing holders, a local government official said.

The Orissa government had suggested approaching the Supreme Court to seek legal advice on the auctions but miners represented by Mideast Integrated Steel Limited and Orissa Manganese and Mines Limited moved the Orissa High Court, challenging the auction process on the grounds that government’s decision to reject all applications for second or subsequent renewal of mining leases prior to auction was “untenable in face of law”.

The proposed move makes Orissa the first province to be a step ahead of the federal government, which was also moving towards making auctions mandatory for allocation of mineral resources like iron-ore, manganese and bauxite.

The Indian government has approved bringing in an ordinance to amend the Mining and Minerals Development and Regulation Act to give legal teeth to the preference for these mineral resources to be allocated to miners through competitive bidding.

The provincial government decided not to include mining leases awaiting first renewals and leases already issued approval but awaiting execution of lease deed on the list of mines to be put on the auction and this too has been challenged in the petition.

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