Steel Authority of India Ltd (SAIL) will reopen its iron ore mining operations in Jharkahand from Wednesday.

Union Steel Ministry sources told BusinessLine that the Ranchi High Court has asked the State Government to allow resumption of operations at SAIL’s Gua mines with the penalty clause.

SAIL had challenged the penal condition placed by the State before the Ranchi High Court for renewal of one of its iron ore mining leases at Gua in Jharkhand’s West Singhbhum district. Under the State government’s order, this mine’s operations were stopped from the first week of September till Tuesday.

The Court has, however, told SAIL to fulfil other conditions before restarting of operations. In its petition, SAIL said that the State government did not have powers to ask the miner, which had been continuing with its operations on “deemed” renewal status, to pay for the total value of the minerals extracted since the expiry of the leases.

SAIL’s lease had expired in February 2009, and was due for renewal. SAIL sources said the application of renewal was made within the prescribed timeframe.

Deemed renewals

However, the Government failed to execute the lease renewal and let the public sector steel maker to continue operations at its captive mine on “deemed” renewal.

Mines and Minerals (Development and Regulations) Act, 1957, and Mineral Concession Rules, 1960 permit such “deemed” renewals. However, a Supreme Court-guided recent amendment in the law ended the practice of deemed extensions.

The Supreme court is now hearing the “common cause” case for all iron ore miners related to the alleged irregularities.

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