Odisha to auction five mineral blocks after new rules

Under the new Rules, states have the flexibility of allocating the block in the second round itself even if there are less than three bidders.

Last Updated : Dec 07 2017 | 5:51 PM IST

After the recent notification of the new Mineral Auction Rules, the Odisha government is gearing up to put five mineral blocks under the hammer.

"We are going to issue Notice Inviting Tenders (NIT) for three iron ore, one manganese and one graphite block by the end of this month. The auctions would be conducted according to the revised Rules issued by the Union mines ministry”, said a government official.

Under the new Rules, states have the flexibility of allocating the block in the second round itself even if there are less than three bidders. This provision is expected to make the auction process less cumbersome and will help states auction mineral blocks quickly.

Moreover, under the amended Rules, miners would be able to dispose of 25 per cent of dumps which are not used for captive purposes. The amended Rules also have the provision for adjustment of upfront premium against due payments of the miner at the earliest. This measure is expected to increase the liquidity of the mining entities at the most stressed times when production begins.

The latest Auction Rules have eased the requirement of net worth for the prospective bidders. In practical terms for an average annual production of up to Rs two crore, the net worth required was Rs four crore, which is reduced to Rs 0.5 crore. For an average annual production up to Rs 20 crore, the net worth required was Rs 40 crore which has been reduced to Rs 10 crore.

As per the estimates of the Union mines ministry, a total of 34 mineral blocks would be put to electronic auctions before the end of March 2018. In addition to Odisha, other mineral bearing states like Chhattisgarh, Gujarat, Maharashtra, Rajasthan and Telangana would be organising the e-auctions. From auctions of these blocks, states are expected to mop up Rs 75,000 crore additional revenue.

To this date, 33 mineral blocks have been successfully auctioned. The auctioned assets are valued at Rs 1.69 lakh crore with the additional revenue pegged at Rs 99,000 crore.