Odisha Govt to Auction Iron Ore Mining Leases, Trade Unions Demand Job Security

Kolkata: In what seems to be a rare coincidence, the Odisha government’s administrative action and trade union action by units of the All India Trade Union Congress (AITUC) have begun virtually simultaneously on the issue of switch-over to auctioning of leases for iron ore mines from the existing allotment of leases on nomination basis.

The AITUC units – Keonjhar Mines and Forest Workers’ Union (KMFWU) and Sundargarh Mazdoor Union (SMU) are just through their maiden action plan on the issue at Barbil in Keonjhar district – a tiny town – also referred to as the iron ore capital of Odisha. The first action was to submit a memorandum addressed to Odisha’s chief minister through Barbil’s tehsildar and the second programme was to hold a demonstration at Barbil.

The two-day programme of KMFWU and SMU was in support of the demand that auctions of mining leases, as a result of which new ‘owners’ would emerge on the scene, should not mean shrinkage of job opportunities. Another demand is that the workers now involved in raising iron ore should continue. This objective should be borne in mind by the new ‘owners’ if they contemplate further mechanisation of operations, Ramkrushna Panda, president of KMFWU told NewsClick. Workers are apprehensive that new ‘parties’, who emerge successful in the auctions, might attempt to reduce the existing workforce, Maheshwar Rout, general secretary of SMU added.

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The Odisha administration has set in motion the process to organise auctions for mining leases for as many as 24 iron ore mines. The leases in those cases, allotted on nomination basis, would terminate on March 31, 2020. The process is time-consuming, as it involves a good number of clearances – forest-related and environmental. In 2022, lease of another three-four mines would expire.

This will be the first instance of organised auctions in terms of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, which repealed an Ordinance. The Bill was passed by Lok Sabha on March 3, 2015, and by Rajya Sabha on March 20. It received the President’s assent on March 26 and was gazetted on March 27. It was made clear that it would be deemed to have come into force from January 12, 2015.

A major change under the auction process will be that a lease will be available straightaway for 50 years and on the expiry of that period, there will be no question of renewal. It will come up for re-auction. This applies to all minerals other than coal, lignite and atomic minerals. Under the existing arrangement, the lease tenure varies – 20 years to 30 years and maximum 50 years through renewals, according to Rout. A two-stage auction model – initially a technical bid and thereafter a financial bid— has been prescribed.

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Anticipating delay in completion of the process, the Odisha government suggested to the ministries of environment and forest, and mines that to avoid disruption in ore raising operations, the state government may be given leases on a temporary basis for two years. By this time, the entire process would be through and then, the state government would transfer the leases to the successful bidders.

The Centre does not think that the suggestion can be acted upon without an enabling provision in the relevant Act/s through an amendment. A hint to this effect was given by Odisha’s director of mines Dipak Mohanty when asked by NewsClick. Mohanty said that he was hopeful of the Centre’s early decision.

On being questioned on the issue, director-general of forests and special secretary in the environment and forests ministry, Sidhanta Das said a new situation had arisen, marking a total break with the arrangement in vogue for a long, long time. “To ensure continuity of iron ore production, we are examining legal aspects as to whether temporary clearances for one year can be given. Earlier, there was a provision for temporary working permits. Our law officers are studying the matter,” Das said.

In the context of clearances required, it may be mentioned that mining, including underground mining, is a non-forestry activity. For any forest area, prior approval of the Centre is essential. The Forest Act applies not only to surface area but also to underground area, beneath the forest. A scheme of compensatory afforestation has to be prepared by the divisional forest officer concerned.

Transfer of non-forest land has to take place prior to commencement of the project and the cost of compensatory afforestation has to be built into the project cost .Where non-forest land is not available, afforestation has to be carried out over degraded forest land twice in extent. Public hearings are a must for environmental clearance. The exercise has to be preceded by environmental impact assessment study and preparation of an environment management plan. An expert appraisal committee assesses the realistic minimum need of forest land. It’s an elaborate process.

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According to Rout, the 24 mining leases which are to come under the hammer, account for a monthly production of around 9.5 million tonnes (mt), as per the limits set under the environmental clearance. This means an annual production of almost 115 mt. The major leaseholders include Essel of the Aditya Birla Group, Rungta Group, M/S Serajuddin & Co and KJS Ahluwalia. Around 20,000 workers engaged in different types of work are involved in the operations of these mines.

Panda and Rout said that their two unions would hold demonstrations every month to ensure that the workers’ interests have been safeguarded. The state government just cannot take the stand that their job is to conduct auctions, they added.