Auction of three limestone mines fetches Rs 16,201 crore; Gujarat govt to auction 9 more mines

The bids were won by Adani Cementation Ltd, JSW Cement Ltd and Shree Cement Ltd. They together will pay Rs 324 crore annually to the state government for 50 years, which is the estimated age of the mines.

Written by Avinash Nair | Gandhinagar | Published: August 20, 2017 4:54 am

In what is being touted as one of the biggest success stories in e-auctioning of mines in Gujarat, the state government is set to earn a whopping Rs 16,201 crore from the e-auctioning of three limestone mines in Kutch district. Officials said that this was nearly 2.5 times the revenue, the state would have earned if it had followed the traditional allotment process. Buoyed by the success of the auctioning, the government has scheduled to auction nine limestone and bauxite mines in the next six to nine months.

“Despite poor sentiments prevailing in the cement industry, we have earned a premium in the e-auctioning of three mines in Mudhvay area of Kutch district. This was the first e-auction conducted for a major mineral in the state,” Roopwant Singh, head of Commissionerate of Geology and Mining told The Sunday Express.

The three mines, put together, have a total reserve of 751 million tonne of limestone and are expected to last for 50 years. According to Singh, the government would have earned Rs 6,620 crore if the mines were allotted instead of auctioning them. “Now, the government gets additional Rs 9,581 crore as auction premium over royalty,” Singh said, adding that transparency, speed and competitiveness were some of the major advantages of the e-auctioning process.

The bids were won by Adani Cementation Ltd, JSW Cement Ltd and Shree Cement Ltd. They together will pay Rs 324 crore annually to the state government for 50 years, which is the estimated age of the mines. “The payment of the first installment, being 10 per cent of the up-front payment, has been received from all preferred bidders,” said Singh.

Meanwhile, the government is gearing up to auction nine more mines. “These nine mines will provide the state with an estimated Rs 1,500 crore in revenues annually,” the official said.

While the bauxite mines, which will come up for e-auction, are in Dev Bhoomi Dwarka, the limestone mines are located in the districts of Gir Somnath, Kutch, Jamangar and Porbandar.

“We will also be redesigning three additional limestone blocks in Kutch and Jamnagar districts and will be putting them up for auction in the coming months,” Singh added.

Among minor minerals, the government is planning to auction 175 blocks, spread over 612 hectare, in nine district. “Apart from this, we will also be auctioning eight blocks of sand in Gandhinagar next month,” Singh added.

Gujarat produces 59 minerals, of which 38 are major and 21 minor minerals, with sizeable reserves of limestone and lignite. Gujarat has about 7,800 mining leases, of which 468 are for major minerals like limestone, lignite and bauxite that contribute up to 45 percent of the annual revenue.

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