The Ministry of Mines has directed the state of Andhra Pradesh to rescind the Notice Inviting Tenders (NITs) for three iron ore and one lead block and issue fresh NITs for them.
The Ministry’s intervention comes after prospective miners complained of eligibility conditions in the tender documents of the Lakshmakapalle (South) and Lakshmakapalle (North) iron ore blocks, the Addankivaripalem iron ore block and the Bandlamottu lead and associated minerals block being auctioned for right to prospect and mine, or as composite licenses.
The state has set qualifying net worth for prospective bidders at more than INR 3,000 crore. In a letter to the state’s Directorate of Mines and Geology, JSPL company Nalwa Steel and Company complained that the amended Mineral Auction Rules 2015 set net worth requirement for composite license at more than 1% of the Value of Estimated Resources and even 0.5% where the Estimated Resource is less than INR 100 crore.
In the absence of a resource estimate, as in the case of the three iron ore and one lead blocks where the potential is identified by available geoscience data, the applicant needs a net worth of INR 25 crore or more to qualify. These conditions have not been imposed on the six gold blocks the state intends to auction along with the iron ore blocks.
Writing to the state last week, the Ministry of Mines said these restrictive conditions, not in accordance with the MMDR Act and mining rules, would limit participation “having a direct bearing on the final bids and thereby causing loss of revenue to the State Government.”
The state’s tender documents also insist on employment of local people which the Ministry points out is covered under Section 3 of the Industries and Factories Act, 2019, and need not also be a part of the NIT.
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