As the government goes ahead with plans to auction non-coal minerals, miners' body FIMI today opposed the move saying it has the potential of becoming a "bigger" scam than coal and 2G put together.
"As will be known in times to come, auction route is fraught with danger of as much scam as might have happened in the past. It has the potential to being bigger in scope and ramifications as so-called coal and 2G scams put together," Federation of Indian Mineral Industries (FIMI) said in a statement.
"Unless governance improves which is in the hands of government/politicians, any alternative thought or suggestions such as auctions will end in bigger and bigger scams and the country will pay heavy price," it added.
FIMI said auction on the basis of the "mineralisation" instead of "fully-explored" resources will lead to distortion of the auction process as resources and their quality would either turn out to be higher or less with serious consequences to the government or the buyer.
The government is set to go ahead with the auction route for allocation of minerals such as iron ore and bauxite, bringing changes to the Mines and Minerals Development and Regulation (MMDR) Act, 1957. It is also set to take the ordinance route to pave way for the auction system for such minerals.
"Auction of the prospecting licences, particularly of deep-seated minerals, without reconnaissance is just unthinkable. One does not know what minerals, its grade and depth, will be available.
"The result that metals like gold, copper, lead and zinc, nickel, diamonds, etc will never be explored and exploited for country's benefit and will always be imported," FIMI said.
Stating that the worldwide no country adopt the route of auction for mineral development, it said," auction will always be under suspicion as it can not accommodate frequent fluctuations."
"Auction completely eliminates the ability to manage risks associated with technological innovations and discovery of alternatives to a mineral commodity," it said.
