Mineral end-use to be decided by states

The states can also decide the eligibility criteria for auctions

State governments will retain their right to reserve the end-use of any mine to be auctioned under the new mining law. They can also decide on the eligibility criteria for such auctions.

"For any mine in which the end-use is reserved before auction, the states can decide the eligibility criteria in the tender document," said an official on the condition of anonymity.

This is in contrast to the eligibility criteria the Centre had earlier proposed for states if they reserved the end-use of any mine.

Final auction rules allow minerals like bauxite, iron ore and limestone to be reserved for alumina, steel and cement plants, respectively. However, a manganese mine cannot be reserved.

The rules also state the miner must use the mineral for the specified end-use. It cannot sell, transfer or dispose of any of the mineral extracted.

Earlier, draft rules had proposed a company would not be eligible for bidding if a mine's reserves exceeded 1.25 times its requirement over a period of 50 years. While calculating this, reserves held by the bidder or its affiliates in other mines were to be taken into account.

The draft rules also said a company or its affiliates would not be eligible for bidding if they held a reconnaissance permit or prospecting licence for the same mineral.

The rules were changed following concerns raised by Rajasthan and Madhya Pradesh that the cap on reserves would be difficult to implement in view of future expansion. Madhya Pradesh wanted to know if future expansion or new plants were to be included when computing the total mineral requirement.