Govt: States likely to auction 54 non-coal mines in FY18

In June 2015, several mineral-rich states presented a non-coal mineral auction plan to the Centre. Showing their readiness, the state governments told the Central government that 100 mines would be auctioned by December 2015. However, until now, the states have been able to auction only 29 mines.

A few weeks ago, the Central government had decided to simplify the Mineral Auction Rules, 2015, with the aim of encouraging more companies to participate in non-coal auctions.

Through these proposed amendments, the Centre wants to lower the limit of minimum net worth that a company must have to participate in auctions. The draft rules also plan to permit state governments to proceed with auctions if — even in the second attempt — the number of technically qualified bidders for a mine remain less than three.

The amendments — which are at a draft stage currently — will also prevent the company that has won the bid from “squatting” on the mine and adopting “delaying tactics”. Moreover, it will allow the state government to use the “all-India average sale price by Indian Bureau of Mines (IBM)” as a benchmark for auctions if the state’s average sale price is not available.

The Central government has asked the stakeholders to send their comments on these proposed amendments by September 30. As per the new mining law — Mines and Minerals (Development and Regulation) Amendment Act, 2015 — non-coal mines have to be auctioned by the respective state governments.