The Ministry of Mines has issued new rules that will now allow auctions of mineral deposits to resume. These broadly push for more mineral deposits to be auctioned, by reducing the barriers and clarifying post auction liabilities.
The notification issued on Friday, also prevents states from reserving any deposit for captive use, while allowing post auction captive miners to auction 50 per cent of their ore in the market. Most critically though, through this Mineral (Auction) Second Amendment Rules, 2021, the Centre is claiming a right to decide the fate of a state’s mineral resource. While some states have objected to this, the amended rules nonetheless should hurry the auction of the 12-16 iron and limestone deposits Odisha has had ready since last year.
The amendments also free up areas promised to people under the pre-auction MMDR 1957’s Section 10. As SteelMint reported on 05 Jun, the Chattisgarh government has prioritised 16 virgin areas, including 8 iron ore areas, to auction.
Among other things, the amended rules cover:
- Rule 2: which has been amended to allow consideration of a previous month’s average sale price published by IBM for the purpose of auction. Or in case the state has no data for the mineral or grade for a preceding year, it can consider the pan India average for the same.
- For composite licences the ‘estimated quantity of mineral resources’ in the absence of G4 exploration data is to be arrived at by multiplying the average in a mining lease in the same or adjacent district explored upto G3 level and mineralised area of the block
- Rule 6: bars state Governments from reserving any mine for any specific end use. A mine auctioned as captive will in a financial year be allowed to sell up to fifty per cent in the market on payment of an additional amount specified.
- Rule 17,18, 19: cover bid security which is now 0.25 per cent of the value of estimated resources or INR 50 crore whichever is lower. For deposits where the estimated quantity of mineral resources is not assessed but mining potentiality has been identified, the bid security shall be INR 50 lakh.
- Under these rules the Centre demands the state share the list of all geological details of areas or mines it has, including expired leases within 45 days of the commencement of the Amendment Rules, 2021 and its tentative schedule of auction. It must also share publication of any notification, notice inviting tender for auction and the outcome of the auction in 15 days of its completion as well as termination of any lease. Further henceforth the Central Government can notify any area for auction. In such a case the related provisions applicable to the State Government shall mutatis mutandis be applicable to the Centre.
- Rule 10: a failure to submit the first instalment of the upfront amount in time (15days +15 days extension), will lead to a forfeiture of the bid security and make the mine available to the next highest bidder.
- Rule 23: has been inserted to clarify what would be the last day, if the deadline is a public holiday
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