Not satisfied with the pace of allocation of mines through the auction route, the mines ministry will soon bring out changes in the Mineral Auction Rules, 2015 for non-coal mines, aimed at making the mineral block auctions more effective and ensuring more participation from the bidders. The changes will be intended at removing the small glitches that are coming in the way of whole-hearted participation from the miners.
In the backdrop of poor response from the bidders for non-coal mines auction, the mines ministry had convened a meeting with the stakeholders where the bidders and industry associations highlighted the lacuna in the existing rule particularly those involved with the end-use norms. They also wanted to lower the number of mandatory bidders’ norm. The present rule suggests that an auction has to be cancelled if less than three bidders participate in the auction of a block.
Since the amendment of the MMDR, Amendment Act was passed in 2015, which paved the way for mandatory auctioning of the non-coal mines; only 27 mines could be successfully auctioned. These mines, however, have brought Rs 1.2 lakh crore revenue to the states inclusive of royalty and contribution towards DMF and NMET. However, an almost equal number of auctions had to be annulled because of poor response from the bidders.
Speaking at Assocham Indian Mining Summit here, mines secretary Arun Kumar said the proposed changes in the rules would be put out in the departmental website seeking comments from stakeholders in the current month.
On the issues pertaining to change in definition of captive, he said that captive definition will stay for the existing leases but for auctions the Ministry will see how it can tweak the system legally to allow for a certain percentage of the minerals to be traded as well.
“I would like to say that captive as a definition for the existing leases has been put in the Act and I do not see, in the very short or medium term, the Act changing and therefore the definition of the captive will remain as it is,” Kumar said.
“However for end use stipulations, which the states are putting now for auctions, we want to examine and see whether we can make it more flexible, because if you are getting an auction, you are paying for the material as per the terms of the auction,” he added.
Conceding that there is a need to focus more and speed up exploration, but it is not that dismal as has been pointed out, he said, “The Government is very serious to accelerate exploration, we are well aware of those deficiencies and we are trying to address them.”
On the issue of price control, he said “I think, industry should realize that there can be no artificial way in which prices should be controlled because it is going to be an auction scenario and the person who had bid for the auction has bid on the open market expectations.”
“There is no scarcity, there is enough material available and therefore I do not see a rationale for price controls,” he said.
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