Jharkhand government orders closure of Tata Steel, SAIL and other iron ore mines

BHUBANESWAR: The Jharkhand government has ordered closure of a dozen iron ore mines in the state, including those of Tata Steel, SAIL and Orissa Manganese and Minerals, following the Centre’s move to amend mineral concession rules of 1960 under which mining leases for major minerals are given out.
A day after issuing the directive, the government served notices to these companies on Thursday, dealing a blow to the steelmakers dependent on raw material from their captive mines in the west Singhbhum region. The closure of mines will also impact companies that buy ore from the market, given the already prevalent shortages in the market.

Tata Steel, for instance, has shut its Nuamundi mines, which met 25-30% of the company’s total requirement of raw material and for which it has an environment clearance of 10 mt annually. “Jharkand government will be seeking clarification from the central government. Some other miners are also considering seeking clarification from the Supreme Court,” said a senior Tata Steel official, who did not wish to be identified.

SAIL’s mines impacted by the order are in Gua, Kiriburu and Budhuburu. As ET had reported on August 27, the state government’s move was imminent ever since the central ministry of mines amended the mineral concession rules, following the Supreme Court order in May to limit lease extensions without licence renewals.

The related notification of July 18 changed the rules to allow a grace period of two years only to those companies which applied for renewals for the first time. By clarifying the “deemed provision” under Rule 24(a)(6) could not be extended to mines waiting for second or third renewals, it rendered their operations illegal.

Experts believe the amendment applies to not just iron ore but all other minerals including coal, posing a possible challenge to the Narendra Modi-led NDA government at the Centre which is seeking to spur growth. Speaking to ET earlier, Tata Steel’s managing director TV Narendran had said the company was in discussion with the Jharkhand government and was hopeful of a resolution.

“It is not in the interest of stakeholders to stop mining. Nobody wants it to stop,” he had said. Rajesh Bansal, a former sustainability head at Federation of Indian Mineral Industries, said miners had suffered not only because of undue delays in renewals, largely at the state level, but also because they were forced to get fresh green clearance at the time of renewals, even for areas that had been mined for decades.