The mining leases of 329 private mines is going to expire on March 31, which includes 48 operatives (24 in Odisha, six each in Jharkhand and Karnataka, five in Gujarat, three in Andhra Pradesh, two in Rajasthan, and one mine each in Himachal Pradesh and Madhya Pradesh) and 281 non-operative(184 non-operative mines in Goa, 42 in Karnataka, 12 each in Jharkhand and Madhya Pradesh,9 in Maharashtra, 7in Odisha, 6 each in Andhra Pradesh and Gujarat, 2 in Rajasthan, 1 in Himachal Pradesh) mines. This can cause supply disruptions of key raw materials especially iron ore (since out of the 329 mines, 232 are of iron ore, and of these 24 are operative) which will hamper the economic growth as well.
Global uncertainties and the low raw material price are some of the factors responsible for lower bidding price at the time of the auction for these mines. Metal prices, which are in a downtrend, are not expected to revive soon due to the ongoing US-China trade war. Thus, debt-laden metal companies may not bid aggressively.
Although the mining leases of private commercial miners are being canceled, the government has recently extended the leases of captive mines to March 31, 2030.
FIMI’s Sharma said, “The raw material supplies to steel manufacturers will also be disrupted at a time when India is looking to produce about 300 mt of steel in the next five years and become the second-largest producer in the world”.
Besides iron ore, the mining leases of 21 mines of manganese, 14 of bauxite, 23 of limestone, four of chromite, two of graphite one of garnet and 32 of other minerals will also expire on March 31.
Odisha will be worst affected since half of the 48 operative mines whose leases will expire in March are in Odisha.
