Mineral auction rules relaxed; government expects Rs 75,000 crore from 34 mine auction in FY18
, ET Bureau|
Updated: Dec 02, 2017, 12.57 AM IST
NEW DELHI: The government plans to auction 34 mineral blocks in the current fiscal after having eased the auction rules, and targets to mop up about Rs 75,000 crore in revenues, mines secretary Arun Kumar has said.
Over 70 mineral blocks are likely to be auctioned in the next fiscal to garner about Rs 1,25,000 crore, Kumar told reporters on Friday.
“We had rounds of discussions and we have brought out the amendments in auction rules which we feel will go a long way in smoothening the process,” he said. The changes in the auction rules made on Thursday will result in reduction in failures and quicker disposal of the mineral assets, Kumar said.
Under the old rules, the process of auction was annulled if there were less than three bidders and this process used to be carried out for three rounds at least, and only in the fourth round flexibility was permitted. Each round of auction was carried on for three months at least, which resulted in many blocks getting annulled time and again.
While a minimum of three bidders is still stipulated in first attempt to auction, in the amended rules now the states have the flexibility of allocating the block in the second round itself even if there are less than three bidders. Net worth requirement for bidders have also been relaxed.
Now a company with net worth of Rs 50 lakh can bid for a mineral block with average annual production of up to Rs 2 crore. Earlier the net worth required to bid for such a block was Rs 4 crore. For an average annual production up to Rs 20 crore, the net worth required has been brought down to Rs 10 crore, from Rs 40 crore earlier.
So far 33 mineral blocks have been bid out, Kumar said, adding that the revenue to the states over the lease period from the auctioned mines is estimated at Rs 1,28,000 crore. “In this fiscal, so far 12 mineral blocks have been auctioned, which brought a revenue of Rs 48,000 crore over a lease period of 50 years,” he said.
Earlier, the state used to prescribe end use conditions on miners and it was very rigid. This amounted to inefficient mining as many mines with low grade ore dumps were saddled with this burden as they could neither use it for captive purpose, nor could dispose of it.
Over 70 mineral blocks are likely to be auctioned in the next fiscal to garner about Rs 1,25,000 crore, Kumar told reporters on Friday.
“We had rounds of discussions and we have brought out the amendments in auction rules which we feel will go a long way in smoothening the process,” he said. The changes in the auction rules made on Thursday will result in reduction in failures and quicker disposal of the mineral assets, Kumar said.
Under the old rules, the process of auction was annulled if there were less than three bidders and this process used to be carried out for three rounds at least, and only in the fourth round flexibility was permitted. Each round of auction was carried on for three months at least, which resulted in many blocks getting annulled time and again.
While a minimum of three bidders is still stipulated in first attempt to auction, in the amended rules now the states have the flexibility of allocating the block in the second round itself even if there are less than three bidders. Net worth requirement for bidders have also been relaxed.
Now a company with net worth of Rs 50 lakh can bid for a mineral block with average annual production of up to Rs 2 crore. Earlier the net worth required to bid for such a block was Rs 4 crore. For an average annual production up to Rs 20 crore, the net worth required has been brought down to Rs 10 crore, from Rs 40 crore earlier.
So far 33 mineral blocks have been bid out, Kumar said, adding that the revenue to the states over the lease period from the auctioned mines is estimated at Rs 1,28,000 crore. “In this fiscal, so far 12 mineral blocks have been auctioned, which brought a revenue of Rs 48,000 crore over a lease period of 50 years,” he said.
Earlier, the state used to prescribe end use conditions on miners and it was very rigid. This amounted to inefficient mining as many mines with low grade ore dumps were saddled with this burden as they could neither use it for captive purpose, nor could dispose of it.
