Mineral-rich states told to start auction process, announce bidding dates

The mines ministry has tried to sweeten the bid criteria by proposing that preferred bidders would not be required to pay upfront payment or royalties at the prospecting licence stage.

Written by Priyadarshi Siddhanta | Amsterdam/new Delhi | Published:June 22, 2015 12:27 am

The union mines ministry has told the governments of the mineral-rich states to begin auctioning of major minerals including iron ore and bauxite and announce the dates for inviting the bids.

Chairing the meeting of the coordination-cum-empowered committee (CCEC) attended by top representatives of mining departments of various states on June 5, Union mines secretary Anup K Pujari said the states must adopt a “punctual and professional approach” in planning auction process and ensure value addition in everything they plan to do. “You are requested to inform the dates for starting the auctioning of identified mineral blocks,” an official who attended the meeting told The Indian Express quoting Pujari as telling the representatives. The state governments should not see mining sector only from the point of view of revenue generation. Rather they should approach the sector for its coordinated development and mineral conservation, the secretary emphasised.

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He reminded the representatives from these 11 states that despite being told in the earlier meetings, none of them have furnished a list of non-functional mines. The reason for insisting on the said list is to enable the mines ministry to explore ways jointly with the state governments to make them operational, Pujari said.

He also asked state government officials to also furnish a list of cases where the prior approval had already been granted but mining leases have not been executed.

The mines ministry has been prodding the states to initiate the bids for various mining leases, but the they have been unable to do so far. Union mines minister Narendra Singh Tomar had told this newspaper about a fortnight ago that senior officials of his ministry were dispatched to states like Odisha and Jharkhand to assess their preparedness in auctioning mines. The ministry had identified 199 leases for competitive bidding.

On the ministry’s direction, state-run exploration firm Geological Survey of India has begun the process of uploading 8,000 reports containing exploration data of various mines including their estimated reserves and mineability. This has been done ostensibly to help the prospective bidders to take an informed decision as to which mine they would prefer to bid for. The key reason why the states have been unable to auction leases is to their inability to determine the floor and reserve prices.

Secondly, they have already conveyed to Pujari during the last meeting of the CCEC on April 22 that unless clearances are secured beforehand, the auctions may fail to attract desired level of bids. During the meeting, Rajasthan government’s principal mines secretary Ashok Singhvi had contended that obtaining forest clearances and approvals for land may not be possible for the state governments. It also may not be possible for states to undertake further level of exploration (needed for mining lease auction) as the forest department restricts drilling of bore holes in forest areas as per the guidelines of Union environment ministry.

The mines ministry has tried to sweeten the bid criteria by proposing that preferred bidders would not be required to pay upfront payment or royalties at the prospecting licence stage. Instead, they would need to make payments as per milestones to be enshrined in their respective leases.

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