Odisha may get SBI Caps, MSTC for mine auction

The central mines ministry had asked state govts to expedite auction of mineral blocks, recommended SBI Caps

The state government is likely to rope in SBI Capital Markets Ltd (SBI Caps), a fully owned subsidiary of State Bank of India, as the transaction advisor for auction of mineral blocks.

The auction platform is set to be provided by central PSU MSTC Ltd.

“The high level committee (formed for deciding auction modalities) has already recommended the names of SBI Caps and MSTC Ltd for the conduct of auction of mineral blocks. We want Odisha to be the first state to organise mine auctions. The transaction advisor would assist us in fixing floor price for auctions. The decision on status of the blocks, whether captive or merchant mine, would be taken by the state government,” a top official source told Business Standard.

Initially, the state government has lined up 16 blocks for auctions in the first phase expected to be done by the end of October this year.

Out of these blocks, seven have been explored up to G2 level. These are Kottametta and Uskalvagu limestone block (Malkangiri), Sagasahi-Ghoraburahni iron ore block (Sundargarh), Sagasahi East Iron ore block (Sundargarh), Dholta Pahad Iron ore block (Sundargarh), Balia Pahad iron ore (Sundargarh), Jhumuka-Pathiriposhi iron ore block (Sundargarh) and Garamara limestone mines (Nuapada).

The rest nine blocks- Mankarnacha iron ore (Sundargarh), Pureibahal iron ore (Sundargarh), Chandiposhi iron ore (Sundargarh), Lasarda manganese block (Keonjhar), Pacheri manganese block (Keonjhar), Kendudihi-Parulipada manganese block (Keonjhar), Khandadhar iron ore reserve (Sundargarh), Thakurmunda manganese mines (Sundargarh) and Utsavpalli-Thakurpalli manganese mines (Bolangir) have been explored up to G3 level.

The government has now decided to add three more blocks (at G3 exploration level) including two iron ore and one limestone deposit to the auction list. “Out of 19 blocks identified, 17 will be offered for public auctions while two blocks would be reserved for state PSU Odisha Mining Corporation (OMC). We hope the tender documents for auctions will be readied by September end after completion of DGPS (Differential Global Positioning System) survey for the identified blocks,” he said.

Recently, the central mines ministry had asked all state governments to expedite the auction of mineral blocks under their purview.

“The state governments have to take prompt action for auction by way of identification and demarcation of mineral blocks, assessment of mineralization of the block, auction facilitation, various decisions to be taken about tender process, reserve price fixation, reservation for end use, eligibility criteria, tender price and bid security amount”, said the letter from the ministry.

The ministry suggested that the states may consider engagement of SBI Caps as the transaction advisor for the auction process on nomination basis.

To kickstart the process, the state government has already formed a committee under its development commissioner U N Behera. The committee’s mandate is to monitor the preparatory work relating to auction of major mineral concessions including conduct of DGPS survey and preparation of tender documents.