India has amended the federal mining law to allow for the seamless transfer of regulatory approvals to new owners of operational iron ore mines, as leases of 36 such mines are set to expire on 31 March and be auctioned off.
The amended law will accelerate the process of starting up these mines under new owners and ease concerns of an iron ore supply crunch for steel and iron ore pellet producers from April. A quicker resumption of the new mines will pressure domestic iron ore prices and reduce the need to import iron ore to maintain steel operations.
The government estimates that 60mn t of annual iron ore output will be affected by the expiry of the leases.
An ordinance has been issued by the federal cabinet to allow 20 regulatory clearances, including environmental clearance and approval of the mining plan, to pass from the former leaseholders to the new owners, coal minister Pralhad Joshi said. Normally, such clearances would have taken up to two years, he added.
For the ordinance to become a law, it will require approval by both houses of India's parliaments when it convenes later this month.
There are 15 iron ore leases with total production of 54mn t that are being auctioned in India's largest iron ore producing state of Odisha. Technical bids for these leases were scrutinised on 4 January.
Major steel and mining companies such as Vedanta, JSW Steel, Tata Steel, Jindal Steel and AMNS India (formerly Essar Steel) are participating in these auctions.
Indian steel producers have accelerated iron ore stockpiling in anticipation of a supply crunch from April if auctions of expiring leases are not concluded in time.
By Prasenjit Bhattacharya
