10 states offer 102 mineral blocks for auction in FY19, Jharkhand tops list

Ten mineral-laden states have queued up 102 blocks for electronic auctions in this financial year. With 20 blocks, Jharkhand has the largest number of deposits on offer. Rajasthan comes second with 16 blocks, while Madhya Pradesh and Maharashtra have readied 13 each.   

Among the queued blocks, 42 are of limestone, followed by bauxite (19), manganese ore (11), copper (8), iron ore (6), graphite (6), zinc (3) and two each for emerald and gold.  

Since the enactment of the amended Mines and Minerals (Development & Regulation), 2015, and framing of Mineral Auction Rules, 50 blocks have been successfully auctioned. Karnataka has auctioned 12 iron ore blocks, the most by any mineral-rich state. Six blocks have been auctioned apiece in Rajasthan, Jharkhand and Madhya Pradesh. The new MMDR Act killed the long-standing practice of discretionary allotments of mineral leases, switching to a transparent system of allocations through auctions. 

Data by the Union mines ministry show total revenue to accrue to states from these auctioned blocks over the 50-year leasehold tenure is estimated at Rs 1.81 trillion. The revenue projection envisaged includes royalty and contributions by lessees towards District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET). 

Auctions of mineral blocks have hit the slow lane. Rules mandate that only those blocks that have been explored up to the G2 level are eligible for online auctions. Given the sluggish pace and scale of mineral exploration in the country, numerous identified blocks do not make the grade for auctions. Steel and other end-use industries have been feverishly pitching for relaxing this norm, which has held up the pace of auctions. They feel the G2 level norm is a detriment to the smooth conduct of e-auctions by states. Instead, they have suggested that the rigidity of the G2 norm needs to be reviewed since there is a provision contained in Rule 8 of Minerals (Evidence of Mineral Contents) Rules, 2015. As a remedy, they have suggested that mineral blocks of adequate dimensions can be put up for auctions and the onus should rest on the lessee to ensure G1-level compliance within five years.    

"A lot of technological advancement in geophysical, geochemical and aerial electromagnetic survey with deep penetration level has proved the existence of mineral resources below surface up to 70-80 per cent accuracy level. Even G2 level exploration does not provide reserve estimation so accurately," said a senior official with a steel company.

Most of the available mineral blocks in the country could not be upgraded to G2 or G3 level because of constraints in exploration. India figures among the least explored countries where mineral exploratory activity is limited to two central government agencies -- Geological Survey of India (GSI) and Mineral Exploration Corporation Ltd (MECL). Though the state directorates of mining and geology are also tasked with exploration work, most of them are wanting in expertise, manpower or both.  

Mineral block auctions in the pipeline

Jharkhand: 20

Rajasthan: 16

Madhya Pradesh: 13

Maharashtra: 13

Chhattisgarh: 9

Gujarat: 8

Karnataka: 8

Assam: 4

Telangana: 3

Total: 102.

Source: Union mines ministry data