Govt plans to auction minerals like iron ore, bauxite

The auction is aimed at bringing in reforms in the mining sector and enhancing transparency

In a bid to bring in reforms in the mining sector and enhance transparency, the government plans to auction minerals such as iron ore, bauxite and manganese, Parliament was informed today.

Minister of State for Mines and Steel Vishnu Deo Sai replied in affirmative in response to a query in Rajya Sabha as to whether there is any proposal to auction such minerals.

"An Ordinance was promulgated on January 12, 2015 to amend Mines and Minerals (Development and Regulation) Act, 1957 providing for auction of mineral concessions," he said.

In reply to another query, Sai said the Ordinance provides for "grant of mineral concession through auction by competitive bidding" and "enhancing penal provisions to check illegal mining".

He said changes were being brought in the legal framework to streamline mineral production, including production of iron ore and to introduce "transparent procedure for grant of mineral concession through auction."

It also aims at "removal of discretionary provisions like renewal of mining, increase in tenure of mining leases to 50 years and transition provisions to ensure that mining operations do not come to a standstill".

On March 3, a bill seeking to introduce the system of auction of mines to enhance transparency and augment mineral production was passed in Lok Sabha, with the government terming it a "revolutionary" step.

The Mines and Minerals (Development and Regulation) Amendment Bill, 2015, which will replace an ordinance promulgated in January, was passed amid vociferous protests by members from TMC, BJD and RSP.

Wrapping up the debate on the legislation, Steel and Mines Minister Narendra Singh Tomar had said the bill, once enacted, will increase transparency, end discretion, augment production and benefit the local population.

Noting that iron ore production had gradually declined to 152 million tonnes in 2013-14 from 218 million tonnes in 2009-10 and its export fell to 16 million tonnes from 47 million tonnes, he had said the ordinance was the need of the hour as the crisis in the mining sector has been increasing.

The bill envisages spending of a fixed percentage of revenue generated from mining on the development of local area and abolition of discretionary power enjoyed by governments.

A bill brought by the erstwhile UPA government also ostensibly sought auction but left many windows open to favour a few, the minister had claimed.