In India, nine of the country’s mineral-rich states are expected to sell as many as 70 mines and mineral blocks by the end of this fiscal year, according to the national government’s Mines Secretary. (India’s fiscal year, like South Africa’s, runs from April 1 to March 31.) The states involved include Chhattisgarh, Gujarat, Karnataka, Madhya Pradesh, Maharashtra and Rajasthan. The Mines and Minerals (Development and Regulation) Amendment Act of 2015 requires that deposits of iron-ore and other metals and minerals only be obtained through auctions.
Mines Secretary Balvinder Kumar, who was addressing a Confederation of Indian Industry (CII) conference, stated that the mines and orebodies would be for “captive” use, which means that the company mining the reserves must also consume them – thus, a company must use the iron-ore it extracts in one of its own iron and steel plants. He reported that the auction process for 28 mines and mineral blocks, in five States, had already started.
Karnataka will probably offer the largest number of mines and blocks for sale; the expected number is 15, Kumar told The Economic Times newspaper. This will be as many as those offered by Gujarat, Maharashtra and Rajasthan combined. Chhattisgarh is expected to offer five and Madhya Pradesh three. Chhattisgarh, Karnataka and Madhya Pradesh will probably auction off iron-ore and limestone mines. Gujarat will offer limestone blocks; Maharashtra a bauxite mine, an iron-ore mine, a limestone mine and a tungsten block; and Rajasthan will auction three limestone deposits.
The mines concerned will be auctioned using an online auction process conducted by national State-owned company MSTC, which falls under the aegis of the country’s Ministry of Steel. The process involves the various states inviting initial price and technical bids from interested companies. Those bidders who meet the technical specifications, and thus qualify to take part in the process, are rated in accordance with the initial prices that they offered. Those which are then selected can then take part in the online auction process. The highest bidder wins the auction.
The last day on which to submit bids for the deposits in Rajasthan is January 4; for Gujarat, January 11; and for Maharashtra, January 15. The other auction processes are less advanced or have not yet started. The tender documents for the online auction are based on the Mineral Auction Rules Act of 2015 and the mineral policies of the various states taking part. National State-owned company Mecon, which also reports to the Ministry of Steel, acted as a consultant in the drawing up of the tender documents.
Kumar also told the CII that the country’s national government was in the advanced stages of drawing up a National Mineral Exploration Policy. A draft has been developed, in consultation with the sector. He pointed out that the National Mineral Exploration Trust should have earned an income in the region of 4.5-billion to 5-billion rupees (about $67.4-million to $74.8-million) by the end of 2016. This was because the Mines and Minerals Amendment Act required mining companies to pay a 2% royalty to fund exploration activities.