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Coronavirus brings Odisha’s mining operations to its knees

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Coronavirus brings Odisha’s mining operations to its knees
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The scare of the global Coronavirus pandemic has thrown Odisha’s(Coronavirus brings Odisha’s mining operations to its knees) mining operations off-kilter. Ever since the announcement and its consequent implementation of the lockdown, no fresh production or despatches have occurred from the merchant owned mines. 

Mining leases are now deserted. Highways that once had the customary sightings of truck laden iron ore trundling on the Joda-Keonjhar stretch now wear a desolate look.

The only buzz of mining activity(Coronavirus brings Odisha’s mining operations to its knees) could be heard within the captive lessees owned by the likes of Tata Steel and SAIL. For merchant miners, the clearing of a backlog of previously indented orders has offered the only shred of consolation.

“Between March 19 and 31, we had no production or movement of iron ore from our leases. And, our lease validity ceased on March 31 as mandated in the MMDR Act. For us, the losses could swell to around Rs 300 crore amid a total lack of production and sales. Moreover, the compulsion to pay salaries to all our workforce till a new leaseholder takes over has amplified the strain on our finances”, said a leading merchant mine owner. 

As the state steel & mines department is also under the purview of the government ordered lockdown, no paperwork or formalities could be done to facilitate the smooth transition of the lapsing merchant mines.

Lately, Odisha(Coronavirus brings Odisha’s mining operations to its knees) had successfully conducted the online auctions of 21 iron ore, manganese and chromite mines. All these were operative mines who lease tenure ended on March 31 this year.

The resumption of these mines is shrouded in uncertainty as the Covid-19 continues to scare away both workers and truckers from the mining site.

Mining is one of the mainstays of Odisha’s economy. In FY20, mining is projected to contribute around Rs 10,000 crore. With such a whopping share, mining is the largest contributor to the state’s non-tax revenue basket.

Besides, online auctions held aloft the promise of handsome incremental revenues. At a time when the state government is struggling to keep its revenue resources buoyant in the post-GST regime, mining revenue offered a solace.

But with mining caving into the Covid-19 threat, the future is anything but bright for the state coffers.

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