KOLKATA (miningweekly.com) – Iron-ore mines across the eastern Indian province of Odisha would not be ready for auction for a number of years, despite the federal government’s intentions to start the process by mid-2015.

According to a provincial government official, the Mines and Minerals (Development and Regulation) Ordinance 2015, issued by the government last month providing the legal framework for auctioning of all mineral resources, stipulated that the quantum of mineral deposits of each mine had to be assessed and determined before each block was put up for auction.

But none of the iron-ore mines and deposits in Odisha had been assessed as per the G1 classification of the United Nations Framework Classification, the official said.

He said that the country did not have the technology or the equipment necessary for undertaking drilling to assess mineral resources to the depth required under G1, or detailed exploration, as currently mines were being operated after G2, G3, G4 level assessments of general exploration, prospecting and reconnaissance respectively.

The provincial government reckons that it would take three to four years to complete assessments as per G1 classifications across iron-ore mines and reserves in the province, even if appropriate equipment and technology were made available immediately.

In the absence of such facilities, it would not be possible for the provincial government to adhere to the rules laid down in the ordinance prior to putting up the resources for auction, the official said.

An official in the Mines Ministry said that assessment of iron-ore reserves as per G1 classification would be an imperative as it would be the basis for determining the valuation of the asset and fixing the base reserve price.

It was also in the interest of provincial governments to expedite the process of assessment of iron-ore resources as per the classification and to do so as accurately as possible, as the bulk of the revenue generated from the auctions would accrue to the provincial governments, the Ministry official said.

Simultaneously, the Odisha government was in a quandary over reopening 18 iron-ore mines forced to shut down last year following a Supreme Court order.

The apex court's verdict was that all 18 mines were operating after the expiry of original mining leases and the 'current deemed extension’ of licences was illegal.

As most of the miners had moved the court challenging closure of the mines, the provincial government was neither able to set a deadline for reopening of these mines or to take a decision on whether licences for these mines should not be renewed and instead put up for auction for fresh allocation, the provincial government official said.

Odisha accounted for about 34% of the country’s 28.52-billion tonnes of iron-ore reserves.