Land, dull mkt, restrictive end use impacting mines auction

Land ownership, a subdued market as well as restrictive end use norms imposed by states in the bidding are some of the reasons for lack of interest shown by the industry towards participation in the mines auction.

States had allocated a total of 47 mines bearing minerals such as gold, iron ore, bauxite and limestone for auction in the first round. However, the process had to be deferred for 17 blocks due to insufficient bids.

Seven months after auction process was initiated across 12-mineral bearing states, only six blocks have managed to find buyers - prompting the Centre to direct states to put in "greater efforts". The auctioned six mines will earn revenue, including royalties, of Rs 18,146 crore.

Gujarat, Maharashtra, Rajasthan, Odisha, Jharkhand and Chhattisgarh informed the Centre that though they had put up mineral blocks for auction, the e-auction of 17 mineral blocks had to be deferred due to insufficient number of applications of initial bids, Mines Ministry said on May 30.

"States informed that the key issues have been identified viz quantity and grade of ore, quality of the mineralisation studies, land ownership pattern, general dull market scenario and restrictive end use conditions imposed by the states in the bidding documents," it added.

States assured that they are already in the process of resolving these issues and would be re-tendering the blocks soon, the ministry said.

The findings form part of the high-level National Meet of Mining Ministers, chaired by Steel and Mines Minister Narendra Singh Tomar, in Jaipur last week.

Most states have constituted District Mineral Foundation (DMF) and the rest -- Madhya Pradesh, Maharashtra, Rajasthan and Tamil Nadu -- have committed that they would also complete the process of notifying the rules in one months' time.

Mines Ministry said almost Rs 1,000 crore has been collected into the DMFs by the state governments.

Besides, States gave unanimous commitment to support the Centre's initiative of development of a Mining Surveillance System (MSS) for major minerals.

"They promised to give lease maps of the minor mineral leases which fall within the 500 metre perimeter of major mineral lease, besides giving the lease data of leftover major mining leases (mostly non-working)," the ministry said.

States agreed to extend the MSS for detecting illegal mining activities in respect to minor mineral leases as it can be easily replicated for all minor minerals, where illegal mining is more rampant, it added.