1. Eyeing big revenue mop-up, states offer 98 mineral blocks for auction in FY18

Eyeing big revenue mop-up, states offer 98 mineral blocks for auction in FY18

Enthused by significant revenue mop-up through auction of non-coal mines, mineral-rich states have lined up at least 98 iron ore, limestone and other blocks for auctions in the current fiscal.

By: | New Delhi | Published: May 6, 2017 5:28 AM
Sources said the 22 blocks already auctioned so far will accrue Rs 85,253 crores revenue to the states. (Representative Image: Reuters)

Enthused by significant revenue mop-up through auction of non-coal mines, mineral-rich states have lined up at least 98 iron ore, limestone and other blocks for auctions in the current fiscal.

Following an amendment to the Mines and Minerals (Development & Regulation) Amendment Act, 2015, which made allocation of mines through auctions mandatory, 22 mines have been successfully auctioned, but 24 proposed auctions had to be annulled due to poor investors’ interest. Notice Inviting Tenders (NITs) for 21 mines have already been issued, 77 blocks are in the pipeline, a source in the mines ministry said.

Sources said the 22 blocks already auctioned so far will accrue Rs 85,253 crores revenue to the states. Companies like Shree Cement, Vedanta and Dalmia Cement will pay the amount, which also includes contribution towards royalty, DMF and NMET, to the states over the lease period of 50 years. The estimated value of mineral reserves in these blocks is over Rs 1 lakh crore.

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Mines ministry sources said that Gujarat has lined up 21 blocks for auctions in the current fiscal followed by Tamil Nadu (12), Jharkhand (11), Odisha (10), Karnataka and Maharashtra (9 each), Rajasthan (8), Chhattisgarh (7), Andhra Pradesh (6) and Madhya Pradesh (5). These blocks mainly contain limestone blocks, iron ore, bauxite, graphite and copper.

Chhattisgarh was the first state to successfully auction a mine, Karhi Chandi mine having an estimated limestone reserve of 255 million tonne (MT), through the auction route.

The latest one has also been auction by the eastern state in which Dalmia Cement emerged as the preferred bidder by offering to pay the Chhattisgarh government around `464 for every tonne of limestone production from the Kesla-II block.

Bidding for the block went on for more than 23 hours. A total of 621 bids were submitted by the interested parties including Adanis, Mangalalam Cement and Ultratech Cement. Industry sources said auctions are likely to see fierce competition in the coming days as investors will be more keen on securing raw material sensing heightened demand for their end products.

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