Iron ore mining industry is facing a major crisis with the governments delaying issue of mining leases to companies.

This delay has affected several mining companies' expansion plans, including private and public sector firms.

According to mining company officials, litigations and political interference are the reasons for the delay in mining leases.

In Jharkhand, Chhattisgarh, Karnataka, Orissa and Goa, which account for the bulk of the proven iron ore reserves (13,912 million tonnes) in the country, have been delaying the issue of leases.

Only a few mining companies have been granted fresh iron ore leases in recent years. Close to 1,000 applications for fresh mining leases are still pending before various state governments. This has badly hit the expansion plans of major mining companies, says an office-bearer of Federation of Indian Mineral Industries (FIMI).

The country's top two iron ore exporters from the private sector - Sesa Goa [Get Quote] and Mineral Sales Private - and public sector undertaking Kudremukh Iron Ore Company are some of the companies whose applications for fresh mining leases are pending.

Orissa has not issued a fresh mining lease in the last five years. Similarly, Karnataka has frozen the processing of applications for fresh leases for the last 18 months.

It takes from one to three years for a state government to grant a fresh mining lease, which involves clearances from the forest department, revenue department and environment and ecology department. Subsequently, the Centre has to sanction concurrence.

Applications for fresh mining leases from Sesa Goa, MSPL and KIOCL are pending approval in Karnataka. However, they are unlikely to be processed quickly. The Karnataka government has constituted a judicial commission to examine allegations of nepotism in granting mining leases.

The commission sought an extension of its term to complete investigations.