Odisha to mop up Rs 20,000 cr incremental revenue from e-auctions: Pradhan

Online auctions of mineral blocks will bring in windfall gains for Odisha known for its repertoire of mineral wealth.

Union petroleum minister Dharmendra Pradhan said, the state could mop up an incremental Rs 20,000 crore each year owing to the transparent system of awarding mineral blocks through the auctions route.

“Odisha will be a huge gainer due to the new MMDR (Mines and Minerals Development & Regulation) Act. Previously, states only got royalty”, Pradhan said here at a workshop on 'Enabling Procedures for increase of steel usage for growth of economy' jointly organised by Union ministry of steel, Confederation of Indian Industry (CII) and Ministry of Economy, Trade & Industry, Japan.

Recently, Odisha successfully conducted electronic auctions of 19 lapsing iron and manganese ore blocks now run by merchant or non-captive iron ore blocks. All blocks elicited frenetic bidding with the average premium standing at 106 per cent. While JSW Steel proved to be a major disruptor at auctions, bagging four blocks, ArcelorMittal pocketed the Thakurani merchant iron ore block. Goa's leading merchant iron ore producer won the Nadidih block, quoting a steep premium of 145 per cent.

Pradhan stressed on the need to build a steel ecosystem in Odisha given the state's immense potential to contribute to primary steel production as well as value added products.

“Odisha is the number one steel producer in the country with an output of 27 million tonnes (mt). By 2030, steel production from Odisha can go up to 100 mt. Around 75 per cent of the country's envisaged steel production of 300 mt by 2030 is expected to come from the eastern region”, the minister said.

Rasika Chaube, additional secretary with the Union steel ministry said, “The ministry is concerned about steel consumption in the country. Our per capita steel consumption is 74 kg way below the global average of 225 kg and Japan's 550 kg. Odisha with a per capita steel consumption of 146 kg ranks eighth in the country. The Government of India's plan to infuse Rs 1 trillion in infrastructure will give a huge boost to the steel sector”.

T V Narendran, managing director & chief executive officer at Tata Steel felt there is a positive correlation between steel usage and the country's economic growth. “Steel usage in the country is still at a lower end. Rural market is expected to play a critical role in boosting demand. There is an excellent opportunity for foreign players to come to India and set up their facilities”.

Hemant Sharma, principal secretary (industries & MSME), Odisha said, “As the country is on course to becoming $5 trillion economy, the usage or consumption of steel will be inevitable for second wave of growth. We need to move from production of primary metal to value added products of steel”.