Govt to get Rs 5800 cr from country's 1st mine lease auction

Chhattisgarh has become the first state to successfully conduct mine lease auction of a limestone block, assuring revenue of around Rs 5,800 crore, including in royalty, DMF and NMET contributions, to the Exchequer.

Steel and Mines Minister Narendra Singh Tomar in a tweet congratulated Chhattisgarh government and the Mines Ministry "for bumper success of mining lease auction done for the first time in country".

"Government will get additional amount of Rs 4,413 crore over the life of lease in addition to Royalty, DMF, NMET contributions," he further tweeted.

As of January 15, Chhattisgarh has offered four limestone blocks for auction. In total 23 limestone -- key ingredient in cement making -- has been offered by the states.

Government sources said: "Chhattisgarh has conducted mine auction for a limestone block with resources of about 155 million tonnes with an estimated resource value of Rs 7,500 crore. The block has received a bid of Rs 4,413 crore." This amount coupled with royalty as well as contributions for the District Mineral Foundation (DMF) and National Mineral Exploration trust (NMET) will give the government be a little over Rs 5,800 crore at prevailing prices, they added.

Jharkhand has also got bids for two small limestone blocks, but it is a composite lease or Prospecting License (PL)-cum-Mining License (ML). The auction by Chhattisgarh is the first mining lease auction.

The development comes as a shot in the arm for the government, which has seen few takers for its Limestone blocks in the ongoing mines auction.

The mines auction in Maharashtra, Gujarat and Rajasthan has failed to find many interested parties, forcing the state governments to talk to the industry and working on re-auctioning the blocks.

"Rajasthan, Gujarat and Maharashtra are not getting adequate responses for the auction. Now, the state governments are talking to the industry on how to do it again," Mines Secretary Balvinder Kumar told reporters yesterday.