Source: Google

ArcelorMittal Nippon Steel India (AMNS), a joint venture between ArcelorMittal, the world’s largest steelmaker and Japan-based Nippon Steel, has inked an agreement with the Keonjhar district administration to start mining operations again from the Thakurani iron ore lease.

Thakurani with balance reserves of 180 million tonnes of iron ore is among the 24 merchant mining blocks whose tenure ended on March 31, 2020. AMNS had wrested this mine at Odisha’s online auctions after quoting a steep premium of 107 per cent.

With the signing of Mine Development Cum Production Agreement (MDPA), AMNS looks all set to commence mining from July.

AMNS is the first among the new leaseholders to have executed the MDPA. The agreement signing was overseen by Ashish Thakre, collector & district magistrate, Keonjhar.

Thakre is reaching out to the lessees to get the MDPAs signed on time. Once all leaseholders have inked MDPAs, the state mines department will issue grant orders.

Keonjhar is the nerve centre of Odisha’s mining activity. Joda that houses a cluster of captive and merchant mines, is amongst the most prolific mining zones in the country.

Merchant mines after the expiry of lease validity on March 31 this year have remained suspended since then as Covid tore into the local economy, shrinking demand and leading to the quarantine of workforce engaged in mining.

The recommencement of mining activity at merchant owned leases is critical to reviving plummeting revenues of the state government.

With the April-June quarter proving to be a complete washout due to the virulent pandemic, expectations are running high to offset the revenue losses during the remainder of the fiscal year 2021.

In FY20, the state had garnered mining revenue in upwards of Rs 10,000 crore. The segment is the largest contributor to Odisha’s non-tax revenue basket.

Auctions of the merchant mine blocks are set to bring in windfall gains for the state’s coffers. The state government is estimated to gain around Rs 20,000 crore by way of incremental revenue through the lease period of the blocks spanning 50 years.