Miners want in-principle approvals before auctions of mineral blocks

Delay in securing environment & forest clearances slows the pace of auctions

Mining companies want grant of in-principle approval for environment and forestry cle­a­r­ances before auctioning an asset.

“The key reason why auctions have failed to gain mom­entum is the inordinate delay in getting environment clearance (EC) and forest clearance (FC). It takes three to five ye­ars, running through various stages, for grant of mineral concessions. An in-principle approval for statutory cle­ar­ances like EC and FC and land acquisition should be in place before offering the blo­cks for grant, said an industry source.

At the end of May, 64 mineral blocks had been auctioned. Iron ore auctions seem to have hit a slow lane, with only 17 blocks offered for auction after the amended Mines and Minerals (Development & Regulation) Act was promulgated in early 2015. The list of auctioned deposits include 12 operative blocks offered for bidding in Karnataka, conforming to a Supreme Court order which came before the revised Act was enforced.

The price of acquiring these auctioned assets was deterring, since eight of the 17 blocks received final bids with a staggering premium of over 100 per cent, the highest being 275 per cent of the sale price notified by the Indian Bureau of Mines. Three iron ore blo­cks have been auctioned in Odisha and one each in Jhark­hand and Madhya Pradesh. 

In Chhattisgarh, iron ore auctions are yet to happen. Most of the state’s iron ore resources are concentrated in the Dantewada, Bijapur and Narayanpur districts. Explo­ration work has suffered beca­use of the threat from Naxal insurgents. Jharkhand, desp­ite being endowed with 4.6 billion tonnes or 16 per cent of the country’s iron ore dep­osits, is confronting environmental hurdles. Iron ore is heavily clustered in West Singhbhum district, split into four forest divisions — Sar­anda, Kolhat, Porhat and Ch­ai­basa. The heavily forested zone is home to a species of endangered flying lizards and part of an elephant corridor. 

In a recent presentation to the Niti Aayog, the Federation of Indian Mineral Industries said, “Despite the Hoda committee’s recommendations for auction for fully explored surface deposits, the National Mi­neral Policy, 2008, did not acc­ept this as a matter of policy. 

It also gave the wrong impression to the state/central government that there is a lot of margin with the mining industry and encouraged it to impose more taxes, so much so that the industry became unviable. In course of time, the auction regime failed even in the case of surface deposits.”