Govt asks states to consider SBICAP & MSTC for mineral auctions

SBI Capital has been already been engaged by Coal Ministry as transaction advisor for coal block auctions

The government has asked states to consider engaging SBI Capital Markets, the investment banking arm of State Bank of India, as transaction advisor and MSTC as the e-auction services provider for the upcoming non-coal mineral auction.

In March, the government passed the Mines and Minerals (Development and Regulation) Amendment Act, 2015, paving the way for states to auction non-coal mineral mines.

The mines ministry nominated SBI Cap as the transaction advisor to expedite implementation of the Act and to establish a suitable auction mechanism.

“Mines Ministry has engaged SBI Capital by nomination …by forming a committee to formulate the terms of reference of transaction advisory and assess the reasonability of rates," said the letter sent to principal secretary of all state governments.

SBICAP has been already been engaged by Coal Ministry as transaction advisor for coal block auctions.

“As it is necessary to expedite the process for auction, the states may consider the engagement of SBICAP as transaction advisor, if required, may be done on nomination basis, as feasible under extant rules,” the letter added.

The government has also advised states to consider engaging state-run metal scrap trading company MSTC as its e-auction services provider.

“This will save time and ensure transparency, being a government-owned agency having no conflict of interest in auction process," said the letter.

States can negotiate the fee for transaction advisor and e-auction provider directly with the concerned agency depending on the nature of services to be taken and on the extent of the work load.