Working with states to enable mines auction by year-end: Tomar

Says since mines is a state subject, the auctions will be conducted by the states and the central govt's role will be limited

The Centre is working with states to start by year end the auction process for about 200 mines containing minerals such as iron ore, bauxite and limestone, Steel and Mines Minister Narendra Singh Tomar said.

Parliament passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2015 in March, paving the way for auction of these mines.

"We are trying that mines auction should start by the end of 2015," Tomar told PTI in an interview.

Since mines is a state subject, the auctions will be conducted by the states and the central government's role will be limited to framing the rules that are to be followed in the process, he said.

The states will not require the Centre's approval for auctioning mines and they can also allocate the mines for their PSUs, he added.

The Mines Ministry has identified 199 such mines that can be allocated through the auction route. They are located in mineral-rich states like Rajasthan, Jharkhand, Madhya Pradesh, Chhattisgarh, Karnataka and Odisha.

"We have introduced auction as the only way of granting mining concessions, which is bound to bring transparency, fair-play and clarity in the concession process. This will also boost investor confidence, incentivising investment in this sector," Tomar said.

The lease period has been extended to 50 years, thereby granting security to miners, who will not be driven from pillar to post for the process of lease renewals, he added.

"Soon after this government took charge, the royalty rates of minerals were revised which had been pending for the previous 5 years," Tomar said.

This move is expected to increase revenue earned by states as royalty from Rs 9,400 crore to Rs 13,300 crore. In a few states, this rise is expected to be of the tune of 45 per cent, he added.

Another area that needs focus is mineral exploration, the Minister said.

"Now that auction has been introduced to dispose mining leases, exploration is no longer a choice, but a necessity, since mining blocks will be notified for auction only after conducting necessary exploration work," he added.

The government has introduced a National Mineral Exploration Trust, which will be financed by an amount equivalent to 2 per cent of the royalty paid by leaseholders (at the existing rates of royalty, an amount of Rs 300 crore per year is expected to accrue to this Trust).