Domestic miners divided over auction of mineral mines

Domestic miners are seem to be divided on the idea of auctioning of mines of bulk minerals such as iron ore and bauxite as mooted in the draft MMDR bill, 2014.
A section of miners believe the idea is ill-conceived, while others feel auctioning of mines will bring favouritism to a permanent end providing relief to genuine users.
Those opposed to the idea argued that auctioning of mines was possible only when proper information on the resources is available. "Without assessing the deposit, how can you auction a mine and who will participate in that?" asked a miner, who wish not to be quoted.

Another miner on the condition of anonymity said that the auction of mineral resources is not a popular practice anywhere in the world except in Russia, Kirghistan and Kazakhstan.
It could also lead to monopolistic practices as well as cartelisation by the financially strong players to try and corner the resources in the country, the miner said.
However, backing the idea, Sesa Sterlite group CEO Tom Albanese said: "The amendments proposed in the existing MMDR Act are progressive looking. While we will study the Act in detail, the auction process mentioned would incentivise states to unlock the value and potential of the immense natural resources endowment that they possess."

A prominent miner from Karnataka said assessment of the mines should be done by an international company so that there is no incongruity on the reserves and a willing bidder can bid with confidence.

Aimed at improving transparency in allocation of mineral resources, government has sought to amend existing Mines and Minerals (Development and Regulation) Act, 1957 to introduce competitive bidding through the auction route for iron ore and other minerals.
"In order to both improve transparency in allocation as well as to ensure a fair share of the value of minerals for the government, the Bill prescribes competitive bidding by auction as the method to be followed for allocation of Mining Leases (MLs) in respect of notified minerals," Mines Ministry said in the draft copy of the Mines and Minerals (Development and Regulation) Bill, 2014.

The government has also proposed to grant a combined prospecting lease-cum-mining lease for non-notified minerals through a competitive bidding process.