12 firms vie for Odisha's huge iron ore block

A dozen companies are in the race to gain mining rights over a huge iron ore block offered for auction by the Odisha government.

Odisha kicked off the mineral block auction process in December last year with the offering of the Ghorhaburhani-Sagasahi iron ore block with geological reserve of 99.59 million tonne. The block is at G2 exploration stage and located in Koira sector in Sundargarh district. The block has been reserved for integrated steel plant as end use and mining lease (ML) will be issued to the successful bidder.

The technical bids for this iron ore block along with a limestone deposit opens on February 11.

"The iron ore block from Odisha has seen good participation compared to other states who have put their blocks for auctions. Elevent to 12 bidders are in the fray to bag this block. It is a high quality block with huge reserves", said an MSTC source. MSTC Ltd is providing the online platform for conduct of electronic auctions.

He declined to name the bidders.

The mineral concession area is spread over 139.16 hectares (ha) including 20.88 ha forest land, 110.69 ha government land and the balance 7.58 ha private land. Survey of the mineral block has been done by the Geological Survey of India (GSI).

The successful bidder who bags ML for the block will obtain all statutory licences and permits needed for mining like forest clearance, wildlife clearance, environment clearance, consent to establish, permission for mine opening and consent of the gram sabhas.

In the first round of e-auction, the bidder is required to submit the technical bid and initial price offer which would be a percentage of value of mineral despatched and must be equal to or greater than the reserve price. The highest initial price offer among the technically qualified bidders would be the floor price for the second round of online auctions.

In the second round of e-auctions, the qualified bidders would submit their final price offers which would be a percentage of the mineral despatched and must be greater than the floor price. The e-auction process would be annulled if none of the qualified bidders submit final price offers. The qualified bidder who submits the highest final price offer would be declared the 'preferred bidder'.

Then, the state government would issue a 'Letter of Intent' to the preferred bidder upon payment of first installment of the upfront payment. The state government and the state government would enter into a mine development cum production agreement.