Andhra Pradesh has put up three iron ore blocks in the Prakasham district to be offered as composite licenses. The three blocks are Lakshmakkapalle North, Lakshmakkapalle South and the Addankivaripalem, all three in the Pamuru Taluka which includes some forest area.
The government is expected to seek prior approval soon from the Centre to auction another three iron ore blocks in Kadapa district.
Tenders for the three blocks on offer can be bought before 28 March, which is also the cut off date for technical bids and initial price offers. The qualified bidders will be announced on 11 April, with forward auction on 18 April and an announcement of the preferred bidder on 19 April.
The mines are being granted as composite leases with successful prospecting leading to a seamless mining lease in a two-stage process because the government has little idea of the geological reserves, the data marked as G4 or reconnaissance level.
During the prospecting stage the lessee is expected to submit geological data to the state’s mining directorate and the Indian Bureau of Mines regularly as well as inform them of any new mineral discovered. Provided the lessee progresses to mine the block, he will be allowed to also mine the additional mineral at the premium quoted for iron ore.
On completion and submission of its prospecting report, the lessee may proceed to mine after surrendering excess area. The performance security will be equivalent to an amount of 0.50% of the value of estimated resources established after completion of prospecting. This will be adjusted every five years to continue to correspond to 0.5% of the reassessed Value of Estimated Resources, including the value of any newly discovered mineral included in the mining lease deed.
The upfront payment is to be made in three installments: the first while applying for the mining lease, the second before signing the Mine Development and Production Agreement and the third, or remaining 60%, subsequent to execution of the MDPA, following which the State will execute a mining lease. The lessee has three years to fulfil the conditions and sign a lease from the date of the letter of intent for mining lease.
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