Two non-coal mines up for grabs

After auctioning six non-coal mines till date under the new mining law, only two mines would be coming up for auction this month. It would be followed by auctioning of Karnataka's 14 iron-ore mines next month. Overall, the Union government expects the auctioning process of 43 mines to get over in the next two to three months.

The government has auctioned a total of six non-coal mines till date. The only iron ore mine which was auctioned (Ghoraburhani-Sagasahi of Odisha) saw the highest amount of interest from bidders.

The winner - Essar Steel - will now be paying 44.35 per cent of 'value of the mineral dispatched monthly' with the state government. It is expected to help the state government earn Rs 8,216 crore over the next 50 years. At the start of 2015, the government was planning to complete the first phase auction process of 80 odd mines by end-November. However, only four states had issued notice inviting tenders for 27 mines till then as the states were inexperienced in the auction process.

According to the new Mines and Minerals (Development and Regulation) Act, 2015, state governments have to auction their non-coal mineral mines through a two-tier forward-bidding process. Before this Act, mines were handed out to miners on discretionary basis by the state governments.

Mineral auction rules under the new mines Act state bidders will have to quote the percentage of the value of the mineral dispatched from the mine in a month in the first round.

 

The highest initial price offer would be considered the floor price for the second round of auction. Subsequently, the bidders would be ranked on the basis of the descending initial price offer submitted by them. The first 50 per cent of the ranks, or the top five bidders - whichever is higher - would be qualified for participating in the second round of e-auction.

The second-round will follow the simple forward-bidding process, where the bidder quoting the highest percentage would be deemed the winner.