First non-coal mineral auction sees a slow start

Four states issue notices inviting tenders for mines auction

The non-coal mineral auction process, which is happening for the first time in India, has seen a slow start with only four states issuing notices inviting tenders (NITs) till date, said a senior government official.

“Gujarat, Rajasthan, Maharashtra and Karnataka have issued NITs for 27 mines till date,” the official added. The Centre had expected the auction process for the 80-odd mines to begin by November-end.

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• Tenders for 27 mines have been invited so far by four states — Gujarat, Rajasthan, Maharashtra and Karnataka
• Centre expected the auction process to begin by November-end for 80-odd mines. It now expects the auction process to be over by January-end
• Karnataka has issued NITs for its 15 C-category mines, where mining was banned after a 2013 Supreme Court order

Karnataka has issued NITs for its 15 C-category iron mines — where the mining was banned following a 2013 Supreme Court order. Gujarat, Rajasthan and Maharashtra have issued NITs for five, three and four mines, respectively.

According to the new Mines and Minerals (Development and Regulation) Act, 2015, state governments have to auction their non-coal mineral mines through a two-tier forward-bidding process.

“The states are not sure about the auction process as it is happening for the first time. As a result, many of them are adopting a staggered approach,” said the official cited above. “For example, Maharashtra was supposed to issue NITs for nine of its mines. However, the state has issued NIT for only four as it wants to gain some experience first. Even Odisha has been waiting for the other states to go first.”

Even as the auction process has seen a delayed start, the government expects all the nine states to issue NITs by the year-end. “The auction process, for most of the mines, should be over by the end of January,” said the official.

Mineral auction rules under the new mines Act state in the first round, the bidders will have to quote the percentage of the value of the mineral dispatched from the mine in a month. The highest initial price offer would be considered the floor price for the second round of auction.

Subsequently, the bidders would be ranked on the basis of the descending initial price offer submitted by them. The first 50 per cent of the ranks or the top five bidders, whichever is higher, would be termed qualified bidders for participating in the second round of electronic auction. The second-round auction will follow the simple forward-bidding process, where the bidder quoting the highest percentage would be deemed the winner.