Date | Sept 12, 2017:

With 45 of the 74 non-coal mines put on the block failing to find takers, the Centre is set to tweak the auction norms, including relaxation of the end-use policy and minimum bidders’ criteria. The idea is to attract investors, including foreign firms. Besides, the draft Mineral (Auction) (Amendment) Rules, 2017, seeks to amend the existing lacuna in the Mineral (Auction) Rules, 2015, to lower the percentage of minimum net worth required in terms of the value of estimated reserves of the mine for a firm to take part in the auction process.

Since the amendment to the MMDR, Amendment Act, 2015 was passed, paving the way for mandatory auctioning of the non-coal mines, only 29 mines have been successfully auctioned, while 45 blocks put into auction had to be annulled. The Act empowers the Centre to prescribe the terms and conditions for grant of mineral concessions.

Apart from facing problems in land acquisition; end-use condition imposed by the states to ensure that the mined mineral is used only for the specified use has left miners jittery. Currently, mined mineral cannot be sold or transferred or disposed of either directly or indirectly.

As part of the proposed amendments, the mines ministry suggested that mineral equivalent to 10% of the total value of mineral excavated in the previous five years can be sold in the current (sixth) year. “Where a particular mine has been auctioned for a specified end-use, it is seen that certain grades of the mineral may not be useful for the specified end-use. In such a case considering the policy requirement of zero-waste mining and conservation of minerals, a provision is being made to allow disposal of grades not useful for the specified end-use,” it said.

The ministry has also proposed to empower the states to proceed with the auction process with less than three technically qualified bidders. “A good mineral block will anyway attract more than three bidders and therefore, the provision is being amended to allow the state government to continue with the auction process if in the second round in the event the total number of technically qualified bidders continues to be less than three,” it said.

Apart from limited number of successful auctions, the auctions have been limited to the extent of both from the perspective of minerals and the number of the auctioning states. Only five minerals, primarily iron ore and limestone, have been auctioned so far and only seven states took part in the process.

(Source: http://www.financialexpress.com/)