SBI Caps to suggest rules for mines auction

It has been asked to submit the report soon so that the process can be started after consulting stakeholders

Moving expeditiously to resume the process of mines allocation, the mines ministry has appointed investment banker SBI Capital Markets to suggest rules for auctions and the bidding parameters for selection.

SBI Capital Markets is the investment banking arm of State Bank of India.

The move, around 15 days after the President promulgated the mines ordinance, paving the way for introduction of a auction system for allocation, will help the Centre fulfil the role laid out in the ordinance.

The Mines and Minerals (Development and Regulation) Amendment Ordinance, 2015, prescribes the Centre stipulate the terms and conditions and the procedures, subject to which the auction would be conducted for allocation of all mines.

The Centre is also supposed to lay out the bidding parameters for the selection, which may include a share in the production of the mineral or any payment linked to the royalty payable or a combination of the two.

The mines ministry has already formed a nine-member committee to ascertain reserves in the mines to be put for auction. The committee has also submitted its draft report and will submit the final report by February 13 following consultations with stakeholders on the draft report. The ministry has identified 199 mines containing minerals like iron ore and bauxite that can be allocated through the auction route.

These are located in mineral-rich states such as Karnataka, Madhya Pradesh, Odisha, Gujarat and Maharashtra and contain minerals such as iron ore, bauxite, limestone and manganese ore.

Mines Minister Narendra Singh Tomar had recently said the government aims to begin the auction process in the shortest possible time and exuded hope that the ordinance would be taken up in the forthcoming session of Parliament.