Odisha may notify 2 more mineral blocks for auctions in January

State government likely to come out with a notice inviting tender (NIT) for the blocks next month

The Odisha government is likely to come out with a notice inviting tender (NIT) for two more iron ore blocks, including an iron ore one, next month.

Last Wednesday, Odisha formally kicked off the online auction by issuing NIT for 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.

By the end of January 2016, 66 mineral blocks will be notified for auctions by mineral-rich states — Andhra Pradesh, Chhattisgarh, Goa, Gujarat, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, Tamil Nadu and Telangana.

The electronic auctions will be conducted by MSTC Ltd. The Odisha government has invited technical and financial bids. The bidders are required to pay Rs 5 lakh as fee for purchase of tender document. The last date for purchase is February 5, while the deadline for bid submission is February 10. The NIT was opened on Friday.

The mineral concession area is spread over 139.16 hectare (ha) including 20.88 ha forest land, 110.69 ha government land and the remaining 7.58 ha private land. Geological Survey of India (GSI) has surveyed the mineral block.

The successful bidder who bags ML for the block will obtain all statutory licenses 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.

Site visit of the mineral block would commence on publication of NIT and would end on bid due date. Bidders who have purchased the bid document would be eligible to visit the block and the site-visit is to be done with prior notice to the state government.

ON THE CUSP

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

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.