The auction process for total 44 non-coal mines have been annulled in last three years by respective state governments for reasons such as low quality of mineral, low quality of exploration data, land acquisition issues, demand supply scenario of Indian mineral industry, and high benchmark auction prices. Ultimately, only 43 non-coal mines have been auctioned as on July 12, 2018.
The reasons for failure were listed by Ministry of Mines, through a presentation in front of ministers and officials of 21 mineral-rich states, at Fourth National Conclave on Mines and Minerals held in Indore on July 13, 2018.
In June 2015, various mineral-rich state governments presented a non-coal mineral auction plan to the Centre. Unlike coal auction, it were the states who were going to conduct the auction for non-coal minerals. Showing their readiness, the state governments told the central government that 100 mines would be auctioned by December, 2015. However, it is July 2018, and the states have been able to auction just 43 mines so far.
The Indian Express has reviewed the presentation given by Ministry of Mines on July 13 at Indore. It stated some of the other limiting factors that resulted in lukewarm reaction by industry to auctions: there has been a lack of “provisions for ancillary activities” even within the main mining area; there was a general “dull market scenario” for cement and steel industry at “that point in time”; many mines had the strict conditions regarding the end-usage of mineral extracted.
According to the presentation, nine mineral rich state governments have attempted to auction total 87 mines as on July 12, 2018. Out of these 87, the number of mines that have been successfully auctioned are 43. The presentation stated that the state governments made total 102 attempts to auction the remaining 44 mines, but the efforts did not bear any fruit and the auction had to be annulled in these 44 mines.
The reasons listed by Ministry of Mines on July 13 for the failure are similar to the ones that were listed by it two years back at a similar conference that happened in Vadodara. On October 8, 2016, Balvinder Kumar, the then Secretary, Ministry of Mines, gave a presentation to various stakeholders in Vadodara, wherein he stated that the state governments had to annul the auction of 37 mineral blocks due to insufficient number of applications of initial bids for blocks.
Kumar then listed the reasons in front of the stakeholders: The quantity and grade of the ore, quality of exploration data, land ownership pattern, dull market scenario, end use conditions imposed by the states and apprehensions on average sale price notified by the Indian Bureau of Mines.
As per the new mining law — Mines and Minerals (Development and Regulation) Amendment Act, 2015 — which came into effect from January 2015, the non-coal mines have to be auctioned by the respective state governments. Under the old mining law, the states had the powers to grant the mining lease to any company as per their discretion.