Centre, states to brainstorm on making mines auction in India a success

The Centre has called a meeting of the Indian state governments this month to deliberate on making the next phase of mineral mines’ (iron ore, bauxite, limestone, gold) auction a success after the initial round failed to get a strong response from the industry. The high-level meeting, to be chaired by Steel and Mines Minister Narendra Singh Tomar, is scheduled to be held in Goa by month-end and will also discuss issues like setting up of District Mineral Foundation (DMF), status of National Mineral Exploration Trust (NMET) and steps to check illegal mining.

As per the letter issued by the Union Mines Ministry, a meeting with Ministers in-charge of Mining Department of all state governments has been called by Tomar on key issues pertaining to the mining sector on May 27, 2016 at Goa.

“Mineral blocks need to be prepared for putting them up on mineral auctions by every state government. Identification of major mineral blocks and their auction preparedness will be discussed in the meeting,” the directive said.

According to a senior government official the meeting will take up the issue of tepid response to the mines auctions by the industry as the government wants to work on improving the ease of doing business in the sector.

Besides, the government wants to ensure that next phase of mines auction receive an enthusiastic response from firms and wants to ensure that all issues are ironed out before this, the official added. Last month on the sidelines of the first Maritime India Summit in Mumbai, Tomar had said that states will offer 100 additional mines bearing minerals such as iron ore, bauxite and limestone for auction by 2016-end.

Seven months after auction process was initiated for 43 mines across 12-mineral bearing states, only six blocks have managed to find buyers — prompting the Centre to direct states to put in “greater efforts”.

States had identified 43 mines bearing minerals such as iron ore, bauxite, gold and limestone for auction in the first phase. Only six mines have been auctioned, which will earn a revenue, including royalties, of INR 18,146 crore. At a high-level meeting of representatives from Centre and the states earlier last month, Mines Secretary Balvinder Kumar expressed his “dissatisfaction” on the slow pace with only six blocks having been auctioned by three states.

At Coordination-cum-Empowered Committee (CCEC) meeting, Kumar directed the states to put in “greater effort” on their part to ensure the success of the auctions. The representatives from various states are believed to have said that land ownership, distance of the mine from production site and eco-sensitive zones in the vicinity of the mine were some of the issues that discouraged potential bidders from participating in the auctions.

Mines Ministry has also set up an Inter Ministerial Group to expedite post-auction clearances and approvals to ensure that mines become operational at the earliest.