Auction System for Mines Introduced in January 2015

Ministry of Mines
Ministry of Mines

A National Meet of Mining Minister was organized in Jaipur, Rajasthan regarding the issues relating to mining sector. Speaking on the occasion the Mines & Steel Minister Shri Narendra Singh Tomar said that the auction system for mines introduced in January 2015 has ended the era of corruption, favoritism and nepotism in mining. To further improve the image of this sector, we need to set up District Mineral Foundations at the earliest so that development of areas and welfare of people affected by mining can begin in earnest through Prime Minister Khanij Kshetra Kalyan Yojna (PMKKKY).

The State governments must start using provisions of amended MMDR Act 2015 pertaining to curbing illegal mining to set deterrent examples. Though ultimate aim should be to create an environment where miners themselves understand, own and fulfill their socio-economic responsibilities. For this purpose, Mines Ministry has launched Star Rating System for Mines to recognize self–driven top performers who adhere to best practices. Mining Ministers from nine states, Chhattisgarh, Haryana, Karnataka, Madhya Pradesh, Odisha, Punjab, Rajasthan, Uttar Pradesh and Nagaland participated in the meeting.

The outcome of the one-day session can be summed up as follows:

  • Commitments given by States for Auction:
State Leftover Blocks of 1st Phase to be put up on auction Blocks being prepared for Auction in 2016-17 *
Andhra Pradesh   Ongoing auction of 6 blocks to be completed in July 12 blocks (10 limestone + 2 gold )
Gujarat   5 blocks to be retendered 10 blocks out of which NIT of 4 blocks to be issued this year and remaining  6 in latter part of financial year
MP Ongoing 4 blocks (3 limestone+ 1 diamond) auction to be completed by July 21 blocks – 5 blocks to be notified in 2016 and rest will be notified when exploration completed.
Odisha 7 blocks (3 iron ore + 1 manganese + 1 bauxite + 2 limestone)
Jharkhand 4 blocks (2 limestone + 2 gold)
Karnataka Ongoing   14 blocks of iron ore to be completed in August 27 blocks identified out of which 8 blocks will be put up for auction by December.            For another 15 blocks, GR preparation given to MECL.
Chhattisgarh   9 blocks ( 7 limestone + 2  bauxite)
Rajasthan Total 14 blocks out of which for 8 blocks NIT already issued (7 blocks of limestone + 1 of base metal) 12 blocks (iron ore, manganese, copper, gold, rock phosphate, potash)
Maharashtra 4blocks to be re-tendered    5 blocks ( 1 manganese + 2 bauxite + 1 tungsten + 1 copper)
Tamil Nadu   7 blocks ( 3 molybdenum + 2 limestone + 2 graphite )
Uttarakhand 5 blocks (3 limestone + 1 base metal + 1 Phosphorite)
Total 58 blocks 108 blocks
  • The States of Gujarat, Maharashtra, Rajasthan, Odisha, Jharkhand & Chhattisgarh informed that though they had expeditiously put up the mineral blocks for auction, but the e-auction of 17 mineral blocks had to be deferred due to insufficient number of applications of initial bids. The States informed that the key Issues have been identified viz. the quantity and grade of ore, quality of the mineralization studies, land ownership pattern, general dull market scenario and restrictive end use conditions imposed by the states in the bidding documents. The States assured that they are already in the process of resolving these issues and would be re-tendering the blocks soon.
  • Most of the states have already constituted District Mineral Foundations DMFs. Rest of the States, viz.  Madhya Pradesh, Maharashtra, Rajasthan and Tamil Nadu have committed that they would also complete the process of notifying the rules in one months’ time.
  • Almost Rs. 1000 cr. of money has been collected into the DMFs by the State Governments.
  • Chhattisgarh has committed to showcase the implementation of at least one project under PMKKKY before the mining conclave to be conducted on 4-5 July, 2016.
  • Extension of existing leases under Sub-Section 5 and 6 of Section 8(a) of the MMDR Amendment Act, 2015 was discussed in the meeting and states like Andhra Pradesh, Chhattisgarh, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Rajasthan and Tamil Nadu were asked to expedite the cases on which the state governments have agreed.
  • The mining lease applications saved under Section 10A (2)(c) of the amended MMDR Act, 2015 were also discussed and it was emphasised by the Secretary Mines, that the time limit for eligibility is till 11.01.2017. States of Andhra Pradesh, Chhattisgarh, Goa, Gujarat, Jharkhand, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu and Telangana were asked to expedite the matter within the stipulated time limit.
  • The Star Rating of Mines system started by the Ministry of Mines is likely to initiate a self-driven mechanism of compliance of all statutory provisions and incorporating best practices in mining. All states appreciated this novel idea and committed to support the endeavor of the Central Ministry.
  • States gave their unanimous commitment to support the Government of India initiative of development of Mining Surveillance System (MSS) for major minerals. They promised to give the lease maps of the minor mineral leases which fall within the 500m perimeter of major mineral lease, besides giving the lease data of left over major mining leases (mostly non-working).
  • The States agreed to extend the Mining Surveillance System (MSS) for detecting illegal mining activities in respect to minor mineral leases. As the MSS can be easily replicated for all minor minerals, where illegal mining is more rampant.
  • The States committed to expedite the processing of seamless transition cases from RP to PL & PL to ML, which have also been saved under Section 10A(2)(b) of the amended MMDR Act, 2015.
  • The States have come forward in adopting auctions for minor minerals as per the directive issued by the Ministry under Section 20A to implement transparent systems for giving minor mineral concessions on 17.08.2015. Many States have already established the system for grant to minor mineral leases through auctions. Some States like UP, Punjab, Haryana, etc. expressed the difficulty in the auctioning of minor mineral leases due to litigations in various courts and also difficulties in regard to obtaining of environmental clearances.

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