Right from tweaking the captive use norms to allowing states to proceed with less than three technically qualified bidders, the Centre has suggested a series of changes in the mineral auction rules to ensure more participation in the auction process for allocation of non-coal mines.
In the draft Mineral (Auction) (Amendment) Rules, 2017 that seeks to amend the existing lacuna in the Mineral (Auction) Rules, 2015, the mines ministry has also proposed that the upfront payment shall be payable to the state government in three installments at the earliest against the earlier rule of paying within the first five years of commencement of mineral production.
The changes in the rules were necessitated as the response from the miners were far from encouraging since the amendment to the MMDR, Amendment Act was passed in 2015 which paved the way for mandatory auctioning of the non-coal mines. Only 29 mines have been successfully auctioned since then. However, an almost equal number of auctions had to be annulled because of poor response from the bidders.
One of the reasons for the miners remaining passive in the auction process was the end-use rule which stipulated that they will have to utilize the mined material solely for the specified end-use and the mined mineral cannot be sold or transferred or disposed off either directly or indirectly, if specified by the states.
In the proposed amendment rules, the mines ministry has suggested that mineral equivalent to 10% of the total value of mineral excavated in the previous five years can be sold in the current year.
“Where a particular mine has been auctioned for a specified end-use, it is seen that certain grades of the mineral may not be useful for the specified end-use. In such a case considering the policy requirement of zero waste mining and conservation of minerals, a provision is being made to allow disposal of grades not useful for the specified end-use,” it said explaining the rationale to bring about changes in the rules.
Similarly, since the stipulation of minimum of three technically qualified bidders has resulted in annulment of many auctions, the center is now proposing to empower the states to proceed with the auction process with less than three technically qualified bidders.
“A good mineral block will anyway attract more than three bidders and therefore, the provision is being amended to allow the state government to continue with the auction process if in the second round in the event the total number of technically qualified bidders continues to be less than three,” the center argued
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