[Ferro-Alloys.com]The state government has taken over the Chingudipal chromite mines of Indian Metals and Ferro Alloys (IMFA) after declaring the lease as lapsed since 2006. It has taken the action on the ground that the lease renewal application of the company was incomplete in nature.

 

"The government after due consideration have been pleased to declare the lease lapsed with effect from 24 September, 2006. ... Lease land be taken to the possession of the Government immediately after ensuring compliance to all formalities," said an order of steel and mines department of the state government earlier this month.

 

This is the first case of cancellation of a lease in the state after the introduction of Mines Minerals Development and Regulation (MMDR) Ordinance, 2015.

 

"The RML (renewal of mining lease) application deserves no merit for further consideration in view of the lease is being lapsed, and the changes in the MMDR Act with effect from the date of commencement of MMDR Amendment Ordinance, 2015," the order said.

 

The Chingudipal lease, comprising 26.60 acre land in Jajpur district, was lying inoperative for last 10 years or so as the company did not have any statutory clearance. It had annual chromite output capacity of merely 11,000 tonnes.

 

As per the new rules, the state government can auction lapsed mining leases. Chingudipal mines has estimated chromite reserve of around 300,000 tonne.

 

IMFA had applied for renewal of mining lease for Chingudipal ahead of lease expiry in 2006, to avail the benefit of deemed extension clause under the Mineral Concession Rule (MCR), which provided that if a company files lease renewal application one year ahead of lease expiry, then it can continue to operate the mines even though the application has not been processed by the end of lease validity expiry.

 

Even in the new MMDR ordinance, which has been ratified by the Parliament, the provision of renewal of mines lease has been done away with and a new provision has been inserted, which says mining leases operating under deemed extension provision can continue to operate till 2030 in case of captive consumption.

 

However, the state government said, since the mining activity was not carried out on the lease area, it cannot be considered as running under deemed extension provision. "The lessee is found to have kept the mine inoperative unauthorisedly and still claim that the lease is subsisting under the deemed provision of law," it said in the order. After the lease cancellations, the company has the right to mine four chromite mines (including Bangur chromite mines belonging to Indian Charge Chrome which has merged with IMFA) with total estimated reserve of about 10 million tonne. However, it has been sourcing chrome ore primarily from its Sukinda mine, with annual raising capacity of about 350,000 tonne.