1. Auction system for non coal mines: Why this may not deliver results Centre has in mind

Auction system for non coal mines: Why this may not deliver results Centre has in mind

Lacunae in the auction system for non-coal mines came to the fore at a recent meeting of the stakeholders who form part of the 29-member committee set up to review the decade-old National Mineral Policy (NMP), 2008, by the mines ministry at the direction of the Supreme Court.

By: | New Delhi | Published: September 14, 2017 6:26 AM
non coal mines auction, auction system in india, National Mineral Policy According to the minutes of the meeting, Sharma said the focus should be on having an efficient regulatory mechanism in place and that even a system as one based on auction will degenerate into corruption.

Lacunae in the auction system for non-coal mines came to the fore at a recent meeting of the stakeholders who form part of the 29-member committee set up to review the decade-old National Mineral Policy (NMP), 2008, by the mines ministry at the direction of the Supreme Court. Taking part in the first meeting of the committee, Federation of Indian Mineral Industries’ secretary general RK Sharma said, “Auction may not deliver the results the government has in mind as nowhere in the world mineral resources are developed through an auction-based system.”

According to the minutes of the meeting, Sharma said the focus should be on having an efficient regulatory mechanism in place and that even a system as one based on auction will degenerate into corruption. In a recent order with regard to illegal or unlawful mining in Odisha, the apex court expressed concern over the environmental degradation and asked the Centre to take a fresh look at the NMP as it is ‘almost a decade old’. Also observing that the ‘rule of the law’ needed to be established to prevent illegal mining activities in other parts of the country, it asked the Centre to announce a fresh and more meaningful and implementable policy before December 31, 2017.

“Policy should provide for direct allocation of mining lease to companies who have either set up plant or who propose to make mega investments in the country,” a representative of Assocham said.

Since the amendment to the MMDR, Amendment Act, 2015, was passed that paved the way for mandatory auctioning of the non-coal mines, only 29 mines have been successfully auctioned, while 45 blocks put into auction had to be annulled. Apart from limited number of successful auctions, the auctions have been limited to the extent of both from the perspective of minerals and the number of the auctioning states. Only five minerals, primarily iron ore and limestone, have been auctioned so far and only seven states took part in the process.

Syedain Abbasi, joint secretary, ministry of steel, said that in the auction regime, the end-use players should not be put at a disadvantage in terms of restriction on sale of ore or its use in sister concerns or plants operated jointly or in collaboration with others. “Rules should be relaxed for sale of ore,” he said. If specified for end-use, the present mineral auction rules suggest that the mined mineral is used only for the specified use. The rule has left miners jittery. Currently, mined mineral cannot be sold or transferred or disposed of either directly or indirectly.

Karnataka’s mines secretary also said that restrictions linked to the specified end-use at the time of auction should be minimal with regard to sale and use of minerals. Cement Manufacturers’ Association said that once the areas are identified for mining activity, in-principle clearances should be obtained even before the auction takes place.

The committee will provide recommendations for conservation and mineral development and protection of environment. It will also recommend on the measures for improvement of survey and exploration of minerals, on revamping the database of mineral resources and tenements, scientific methods of mining, manpower development, and infrastructure development.

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