KOLKATA (miningweekly.com) - To resolve the issue of closed mines in the eastern Indian province of Odisha, the local government has decided to renew mining leases through an auction route.

About 18 iron-ore and manganese mines with pending mining lease renewals, which were shut down by order of the Supreme Court last year, would be brought back into operation through the allocation of licences via competitive bidding.

The provincial government’s decision would ensure maximum revenues for the state and 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 government of Odisha was expected to seek clearance for the auctions from the Supreme Court to ensure legal backing for the allocation process.

However, a player in the mining industry, on condition of anonymity, said that the decision to resort to auction had been taken ‘unilaterally’ by the government without consultation with the industry and as such would not stand up to legal scrutiny in view of the original Supreme Court verdict.

The miners in Odisha were still in consultations among themselves on the scope of challenging the proposed auction route through legal recourse, a section of miners said.

The auction process would, however, not include mineral assets currently controlled by Odisha Mining Corporation, the mining entity of the provincial government, or mines with federal government owned and managed mining companies.

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

The Indian government approved an ordinance to amend the Mining and Minerals Development and Regulation Act to give legal teeth to the allocation of these mineral resources to miners through competitive bidding.

The eastern coastal province of Odisha was among the largest geographical repositories of iron-ore resources in the country, accounting for 33.9% of the country’s total 28.52-billion tonnes, as per the National Mineral Inventory. The province also accounts for 26% of India’s 378-million tonnes of mineable manganese resources.