Date | Aug 18, 2016:
The state government of Jharkhand has invited bids for auctioning its first gold mine under the composite licence route.
The bids are being called for the second time for the Pahadia gold mine, as few miners showed interest in the earlier bids called in January.
The block called Pahadia, spread across 272.651 hectares, contains gold and other minerals, according to the notice inviting tender (NIA) dated 16 August posted on the website of MSTC Ltd.
A composite licence holder conducts the geophysical exploration of the area to find out the exact reserve of the mineral and starts mining later.
“The last date for submission of technical bid and initial price offer on MSTC website is 4 October and tender will be opened on 5 October,” says the NIA document.
State-run MSTC is a leading e-auction platform catering to central and various state governments and other entities.
The resources available in the mineral deposit at Pahadia include 1.162 million tonne (MT) of gold ore, with 2.12 gram per tonne of the metal, besides 1.162 tonne of silver, 232.4 tonne of copper, 581 tonne of lead, 1,859 tonne of zinc, 2,905 tonne of nickel and 1.162 MT of quartz.
The Mines and Minerals (Development and Regulation) Amendment Act, 2015, (MMDR) allows auction of mines (excluding coal and lignite) by state governments. However, only seven mines have been auctioned so far under the MMDR, all of them located in Jharkhand, Odisha, Chhattisgarh and Andhra Pradesh.
Among those was the Baghmara gold mine in Chhattisgarh—India’s first-ever gold mine auction. It took place in February this year and was bagged by Vedanta Ltd. The deposit, with a reserve of 2,700kg, will create revenue of Rs.81.40 crore for the state, along with existing royalty of Rs.24.70 crore.
Jharkhand has already leased two limestone mines through e-auctioning under the MMDR.
India has gold deposits spread across several states, including Chhattisgarh, Jharkhand, Madhya Pradesh, Rajasthan, Andhra Pradesh, Karnataka, Kerala and Tamil Nadu.
Interestingly, India and China were the key countries dominating the global gold market in 2015. India’s total demand for gold jewellery, bars and coins increased by 6% year-on-year to 233.2 tonne in the fourth quarter of calendar year 2015 (October-December), according to World Gold Council’s demand trends for 2015.
However, consumer demand for gold during the second quarter of this year (April-June 2016) is likely to go down by 18% to 131 tonne compared with 160 tonne in the year-ago period due to steep prices.
InfraCircle on 29 July reported that due to poor response, the Madhya Pradesh government had cancelled the bid process for the first-ever diamond mine auction in the state.
The Maharashtra government also cancelled the auction of nine mineral blocks due to muted response. These blocks included three bauxite deposits, two tungsten reserves and one block each containing limestone, iron ore, copper and manganese.
The state government had issued a notice inviting tender on 13 June and 22 June to auction these blocks for grant of mining leases.
“Since less than three bids were received for the above blocks, the auction process for the above-mentioned blocks stands cancelled,” the directorate of geology and mining, Maharashtra, said in a notification dated 16 August.
Experts, however, think that the gold deposit will attract investors as cut-off grade of gold in Jharkhand is very good.
“Generally people go for mining of gold with 0.2 gram per tonne of cut-off grade. But the deposit in Jharkhand is really good compared with that. That’s why it will attract a lot of miners. Also, gold prices being on a high will bring in more investors,” said Harbans Singh, former director general of the Geological Survey of India.
However, the gold deposit currently under the hammer is small in size, which could be a matter of concern, he added.
(Source: http://www.vccircle.com/)