Officials say the move will help avoid a potential drop in iron production between 2020 and 2022.

The Union Environment Ministry plans to provide “temporary” forest clearances to prospective bidders for mines whose leases are set to expire in March 2020. The bulk of such mines are located in Odisha and Karnataka.

The traditional process has been for mine developers to be responsible for obtaining necessary clearances to prospect at mines. Officials said that the Environment Ministry would enable clearances to avoid a potential drop in iron production between 2020 and 2022, and catalyse moribund mining auctions.

A key change

This relaxation was necessary because of a change in the Mines and Minerals (Development and Regulation) Amendment Act, which was amended in 2015. The key change is that, unlike in previous years when mining leases were extended every 20 years, new leases would be issued for 50 years and they would be made available via an auction.

Since 2015, when auctions became the norm for leasing out mineral mines, the number of blocks auctioned out has roughly been about 15 a year, which is far fewer than previous years, when allocations ran into the hundreds. The delay in getting environment and forest clearances led to delays in production from mines, according to industry analysts, and hence were leading to a lack of enthusiasm for auctions.

Most in Odisha

Most of the mines up for renewal are in Odisha. The State has seen delays of over a year in conducting auctions for a sliver of blocks due to expire after 50 years in March 2020. Fresh tenders are out and prospective bidders can apply until September 11, according to the Ministry of Mines.

These mines account for 50%-55% of Odisha’s production.

Previously, mine developers were aware that their leases were due for renewal and could therefore initiate the process for forest clearances. However, the change in law has meant that the winner of an auction could begin the process of applying for clearances only after the lease expires, and this could mean a delay in production.

Under discussion

“The new lessee may be allowed to operate an already broken-up mine for a period of one year, during which they can take fresh clearances. During that period, they will be given a temporary permit. This has been necessitated due to a change in the Act,” Siddhanta Das, Director-General (Forests), Union Environment Ministry, told The Hindu. “We are still discussing this proposal, however.”

In FY19, India produced 207 million tonnes of iron ore, 65%-70% of which was by merchant miners and the rest by steel-makers, according to ratings body Crisil.