Chhattisgarh has confirmed two limestone blocks and one Bauxite block ready for auction, the Central Government has informed.
Notably, the Ministry of Mines was monitoring the process very closely with the state governments. The consensus emerged that the Mineral Auction Rules need to be amended to make the process more pragmatic without sacrificing the checks on successful bidders. The Mineral Auction Rules have been amended on November 30, 2017, it informed.
Under the old rules the process of auction was annulled if there are less than 3 bidders and this process used to be carried out for 3 rounds at least. Only in the 4th round flexibility was allowed. Each round of auction carries on for 3 months at least and this resulted in many blocks getting annulled time and again. While a minimum of 3 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 2nd round itself even if there are less than 3 bidders. This will make the auction process less cumbersome and will help states auction mineral blocks quickly.
Earlier the state used to prescribe end use conditions on miners and it was very rigid. This resulted in 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 it of. In the amended rules, such miners will be able to dispose of 25% of such dumps, which are not used for captive purposes. This will help progress towards zero waste mining and utilization of minerals even in low-grade ore. This provision holds good only for the mines that would be granted through auction after 30/11/2017 i.e. the date of publication of the amendment rules. Bid values are likely to improve and participation will improve further.
The amended rules have also provided adjustment of the upfront premium to be adjusted against the due payments of miner at the earliest. This would increase the liquidity of the mining entities at the most stressed time i.e. when production begins. This will further ease their capacity to carry out the business.
A major amendment in the rules has been that the requirement of net worth for the prospective bidders. In practical terms for an average annual production of up to Rs 2 Crore, the net worth required was Rs 4 Crore, which is reduced to Rs 0.5 Crore. For an average annual production up to Rs 20 Crore the net worth required was Rs 40 Crore which has been reduced to Rs 10 Crore
For small bidders the value of unencumbered immovable property can also be taken in net worth, thus allowing larger participation.
Provisions have been made to discourage squatting on bid out leases.
In sum, these changes in Auction rules will lead to enhanced participation in the auction process. Further, it is expected that this will also give a fillip to the auction process and will result in more mineral blocks being auctioned successfully. It is expected that by March 2018, 34 blocks will be put through the process of auction. We expect additional revenue over lease periods to be Rs 75,000 Crore during the balance period of the current year. It is expected that bigger effect of these changes will be felt in the year 2018-19, as some of the auctions may spill over from the current year 2017-18. Given below are the blocks in pipeline for the year 2017-18, which will be put to auction after amendment of Auction rules.
Meanwhile, it may be recalled that the Chhattisgarh Mineral Development Corporation (CMDC) intends to sell iron ore produced from the proposed Aridongri mine in Kanker district of Bastar to steel / sponge iron units at Bhilai, Raipur and Raigarh on priority basis, officials informed.
Efforts are being made to increase the production so that sufficient quantity of iron ore is available for export after meeting the requirements of the expanding home market. Export of iron ore is necessary for earning the much needed foreign exchange, they informed.
The mining at Aridongri will be carried out by opencast mechanized method. The mining equipment required will be dozer, shovel/hydraulic excavator, dumpers, wagon drill. The project area is located near Kachhe village on Dalli-Rajhara-Bhanupratappur road.
It is also accessible by Dhamtari-Bhanupratappur road. The nearest railway station is Dalli-Rajhara situated about 30 km north from the area. Aridongri area is well connected with District Headquarter Kanker (Uttar Baster) by metalled road. The nearest airport is at Raipur.
Significantly, in the month of May 2015, Chief Minister Raman Singh had stated that minerals extracted in Chhattisgarh should be used for units located in the State on a priority basis. This will boost revenue collections and also increase job opportunities while addressing the 9th meeting of Chhattisgarh Mineral Development Fund Advisory Committee.
The meeting was organised by State Mineral Resources Department in which the Chief Minister was informed about various projects underway to explore minerals in the State.
The Chief Minister had emphasized the decision to undertake mineral prospecting work by Chhattisgarh Mineral Development Corporation (CMDC) in the meeting.
Officials informed that in the 2015-16 fiscal, Bauxite exploration works were being undertaken in Pandariya Tahsil of Kabirdham and Murtunda of Surguja district.