List of bauxite mines on auction pruned by Indian government

The list of aluminium ore mines to be auctioned has been pruned. The revised list contains much lesser number of bauxite mines than what was decided earlier. It is quite a setback for the Indian aluminium industry. Against the plan to auction about 90 major mineral mines in 2015-16, the mines ministry is now left with just about 71 mines where the bidding process could start by November this year.

“Few mines had to be removed from the earlier list as total station survey conducted by Mecon revealed that some mines were in naxal-prone areas, some faced land disputes while others had overlapping boundaries. In a few cases, Mecon officials were not allowed to conduct survey by the locals,” said mines secretary Balvinder Kumar.

This spells bad news for companies such as Vendanta Aluminium who is scouting for dedicated source of raw material for meeting the needs of their existing capacity and expansion projects. Non-availability of raw material source is one of the main reasons why Anil Agarwal-controlled Vedanta Resources has initiated the process to shut its aluminium sheet rolling division and foundry in Chhattisgarh. Vedanta Aluminium has initiated the process to shut its one million tonne a year alumina refinery at Lanjigarh.

In all, 199 mines have been identified for auction in two phases. The second auction is to be started within a year of completion of the first round. The first round is targeted for completion by February 2016.

The auction of mines is being awaited by the industry as delay in grant of mines has impacted several metal and mining projects. The sector itself has contracted for the past three years and has only grown marginally at 1.4 per cent in FY15.

The auction of minerals has been facilitated by the new Mines and Minerals (Development and Regulation) Amendment Bill, 2015. Parliament passed the Bill in March. As mining is a state subject, auction of non-coal mines will be conducted by states and the central government's role will be limited to framing the rules that are to be followed in the process. In case of coal, the Centre is monitoring the entire auction process while the proceeds go to the states.