MECL likely to assess ore reserves in ‘C’ category mines

The government is likely to ask State-owned Mineral Exploration Corporation Ltd. (MECL) to study the extent of iron ore mined and reserves left in ‘C’ category mines, to speed up the process of auctioning of mines to comply with directive of the Supreme Court.

The court-appointed Central Empowered Committee (CEC) in its final report on February 3, 2012, placed 166 mining leases in Karnataka in three categories ‘A’, ‘B’ and ‘C’, based on the extent of illegalities committed by the lessees. The CEC brought 51 mines under category ‘C’.

Based on the CEC report, the court, on April 18, 2013, ordered cancellation of 51 ‘C’ category mines and directed the State to re-allot them through a transparent mechanism to end users.

According to Tushar Giri Nath, Secretary, Department of Mines and Geology, the government will file an affidavit before the Supreme Court soon, detailing the steps taken to re-allot 15 potential ‘C’ category mines.

The department needs to know the quantity of ore extracted and reserves remaining in these mines through a scientific study, and it needs the approval of the government to use the services of MECL, Mr. Nath said.

The government had asked National Institute of Technology Karnataka-Surathkal to assess the reserves. But, it could only asses reserves in one of the six allotted mines. Since NITK asked for more time to complete the work, the government decided to hand over the job to a professional organisation like MECL, he said.

UNFC Code

Earlier, the Indian Bureau of Mines (IBM) estimated that 51 C category mines could produce 5 to 6 tonnes of iron ore a year “based on an old model of assessment”. Now the government wants to make an assessment based on the United Nations Framework Classification (UNFC) code for mineral resources. It is a universally applicable method for evaluating mineral reserves. This method consists of three dimensional systems, Mr. Nath said.

Demand notice

The government wants to have a clear picture on the ore extracted by the previous lessees and match it with the royalty paid by them. Once the extent of reserves is assessed, if ore extracted does not match the royalty collected, the department will send them a demand note to remit the royalty for the balance quantity of ore, Mr. Nath said.

The government has appointed CRISIL as the transaction adviser for auctioning of the mines. CRISIL will prepare the tender documents, he added.