KOLKATA (miningweekly.com) – The India federal government is keen to set the ball rolling for the auction of mineral resources in the current financial year, but provincial governments are not ready yet.

Two of the critical issues are an inability to fix the floor and reserve price and the contention of several local governments that mineral resource blocks should be offered along with all mandatory clearances to ensure optimal bids.

A senior government official said that the Mines Ministry had met with representatives from 11 mineral-bearing provinces and that it had asked each of the local governments to start announcing dates on which they would start auctioning iron-ore and bauxite resources in their respective territories.

The communication to the provinces also stressed that local governments should not only see the auctioning of mineral resources as a way of maximising revenue generation, but also as a way of ensuring resource conservation and adopting best mining practices.

However, despite the Mines Ministry’s keenness to get the auction process going and conclude at least the first round within the 2015/16 financial year, several provincial governments have pointed out to the Central Empowered Committee on mineral auctions that mineral blocks would need to be packaged with pre-approvals relating to all mandatory regulations in place.

According to representatives of local governments, while auctioning of mineral resources was within the ambit of the provinces, regulatory clearances were required from federal Ministries. Hence, the response from potential investors might not be to desired levels unless each mineral block came with all mandatory clearances.

Following a joint exercise of federal and provincial governments, 199 mineral blocks across the country had been identified for allocation to private and government-owned mining companies based on the newly promulgated Mines and Minerals Development and Regulation Act 2015, which had made auction route mandatory for allocation of all mineral resources.

The first round of proposed auctions would include iron-ore, bauxite and limestone resources.

The Geological Survey of India had put in the public domain all available reports, indicating exploration data and indicative reserves on all the 199 mineral blocks. However, most of the provinces were in a quandary on fixing a floor and reserve price prior to announcing the bidding process.

Provincial governments had sought direction from the Mines Ministry on whether each of the provinces could fix floor and reserve prices based on different parameters or whether a pan-India formula needed to be worked out at the federal government level and adopted by each of the mineral-bearing provinces, an official said.