Jindal South West (JSW) has secured a mineral block in Goa, winning the Cudnem-Cormolem block with the highest bid; while the High Court has directed successful bidders to obtain fresh environmental clearances
Jindal South West (JSW), one of India’s largest steel companies, has become the first steel company and out-of-state group to secure a mineral block in Goa. The Cudnem-Cormolem mineral block was secured by tycoon Sajjan Jindal’s JSW which quoted the highest premium of 96.6% of the average sale price set by the Indian Bureau of Mines (IBM). The bidding for the mineral block was a close finish between JSW and the previous lease owner, Sociade De Fomento Industrial Pvt. Ltd. Sources revealed that Fomento and JSW aggressively bid for the block, with Fomento trying to retain its leases that spanned across 35 hectares of land. The Cudnem-Cormolem block in Bicholim taluka is spread over a total area of 38.5 hectares and contains geological resources estimated at 9.7 million tonnes with average Fe grade ranging between 54.5 and 56.6%. Meanwhile, the Advalpal-Thivim mineral block V was won by Fomento with a bid of 58.8% of the average sale price set by the Indian Bureau of Mines (IBM).
The auction for five mineral blocks commenced with Fomento bagging the Advalpale-Tivim block with the highest premium of 58.8% of the average sale price set by IBM. The Directorate of Mines and Geology conducted e-auctions for the Cudnem mineral block, the Tivim-Pirna mineral block, and the Surla-Sonshi block. In total, 11 mining and steel companies placed 11 bids for the five mineral blocks. Along with the Cudnem-Cormolem mineral block, JSW has also bagged the Surla iron ore mining block with an auction premium of 109.80% of the average sale price of Indian Bureau of Mines. Kai International, an Odisha based mining company bagged the Tivim-Pirna mineral block with the highest premium of 100.1 percent of the average sale price set by the IMB.
From the first round of auction, the government received INR 43 crore towards the first installment of the upfront fees, with the balance of INR 172 crore to be received upon signing of the lease deeds with the respective mining companies. The first round of auction for four mineral blocks was completed successfully on December 21, 2022, with bids ranging between 63.5% and 111.28%. The winning bidders were mining companies Rajaram Bandekar Mines, Vedanta Ltd., Salgaonkar Shipping Co., and Fomento Resources, all of which were also the previous lease owners. The four mining blocks are valued at INR 43,000 crore by the government.
The auction of mineral blocks in Goa is an effort to boost the economy in the mining belts of Curchorem, Sanvordem, Sanguem, and Quepem. The state government has identified nine mineral blocks to be put up for auction, of which eight are in North and one in South Goa. With JSW becoming the first steel company to win a mineral block in Goa, it marks a significant milestone for the company and a positive development for the state’s mining industry.
Second round of auctions
The second round of mineral block auctions ended two days after the first round, with Jindal South West (JSW) bagging its second block in a week – the Surla-Sonshi block, with the highest premium of 109.8 of the average sale price set by the Indian Bureau of Mines.
The Cudnem-Cormolem mineral block has got around 9.77 million metric tonnes of ore and another 1.12 lakh tonnes of dump.
Fresh Environmental Clearances to be obtained
The Bombay High Court at Goa has directed successful bidders to obtain fresh Environment Clearances (EC). The Bench has directed to do so with regards to commencement of the mining operations at Advalpale-Tivim, Cudnem-Cormolem and Tivim-Pirna mineral blocks. While inviting the tender for e-auction, the Directorate of Mines and Geology (DMG) had stated that these three leases do not require fresh ECs, as the leases are categorised under Section 8 B of Mines and Minerals (Development and Regulation) (MMDR) Act 1957, which speaks about transfer of statutory clearances vested with the previous lease. A total of 15.29 million tonnes of iron ore reserve is available for extraction in these three mineral blocks. It also has around 7.37 lakh tonnes of rejects in the form of dumps. The High Court was informed that the MoEF through an order dated April 23, 2018 canceled the ECs granted to 88 mining leases and neither the mining lessees nor the State challenged the MoEF’s order, canceling the ECs issued by the MoEF on August 22, 2007. Accordingly, the petitioners and Goa Foundation (intervenor) contend that this order of cancellation of ECs has attained finality. They also argued that the amended/substituted Section 8B of the MMDR Act would not apply to ECs that were expressly canceled.
“We clarify that fresh ECs will have to be obtained even by the successful bidders to block -VII or other blocks to which the decisions of the Supreme Court in Goa Foundation-I and Goa Foundation-II apply or to mining blocks in respect of which the ECs were canceled by the MoEF by order dated April 23, 2018,” Justice MS Sonak and Valmiki Menezes said in the judgment passed recently.
The High Court noted that the conscious decision of the Supreme Court in GF-I judgment which was reiterated in GF-II judgment, cannot be bypassed regarding the ECs which were explicitly canceled by the MoEF order dated April 23, 2018, as valid only to grant new lessees/successful auction bidders the benefit of Section 8B of the MMDR Act, 1957.
The Division Bench observed that nothing in Section 8B of the MMDR Act, 1957 revives ECs that are already canceled. Section 8B refers only to valid rights, approvals, clearances, licenses, etc. Further, Section 8B provides that such valid clearances shall continue to be valid after the expiry or termination of the mining lease.
The expression “continue to be valid” pre-supposes that EC was valid on the date of transfer and vesting. “As noted earlier, the proper construction of Section 8B of the MMDR Act, 1957 indicates that only valid ECs were to stand transferred and vested in the new lessees/successful auction purchasers,” the Court said. “If the State Government’s interpretation is to be accepted, then the ECs issued in 2007, based upon which the mining industry in the State of Goa virtually caused havoc by rapacious and rampant exploitation, regardless of any concern for environment, health and well-being of the citizens, would have to be revived and transferred to the new leases/successful bidders.
The impact of rapacious and rampant exploitation, including several severe environmental violations by the mining industry between 2007 and 2012, would have to be ignored,” the Bench further added.