1. Gujarat limestone blocks likely to be clubbed

Gujarat limestone blocks likely to be clubbed

Having failed to elicit response in the recent auction from cement companies, three individual limestone blocks in Gujarat are now likely to be clubbed together for rebidding, sources said.

By: | Published: June 29, 2017 6:51 AM
Gujarat, Gujarat limestone, Devbhumi-Dwarka area, MSTC, Bhatvadiya Block B The state will be the first to take this approach since the auctioning was made mandatory for allocation of non-coal blocks. (Image: PTI)

Having failed to elicit response in the recent auction from cement companies, three individual limestone blocks in Gujarat are now likely to be clubbed together for rebidding, sources said. The state will be the first to take this approach since the auctioning was made mandatory for allocation of non-coal blocks. These three blocks — Bhatvadiya A, B and C — are located in the Devbhumi-Dwarka area of the state. None of these found any bidders, presumably because the estimated reserves in these three were not sufficient to meet the long-term need for bigger cement firms. Mini cement units were also did not find them attractive.
A modern normal cement unit has a minimum of 2 mt per annum capacity while units with as small as 10,000 tonne per annum capacity are considered as mini units.

According to data available with MSTC, which carries out auctions on behalf of the states, Bhatvadiya Block A has an estimated reserve of 113 mt, Bhatvadiya Block B has 52 mt and Bhatvadita Block C is endowed with 158 mt reserves. It generally takes 1.5 tonne of limestone to produce one tonne of cement. Sources said states do not require prior permission from the Centre for such amalgamation of the small blocks into a bigger one. It has been left to the states to decide since they have better local knowledge and the location to arrive at a decision in such cases.

Gujarat has already allocated three limestone blocks. However, these are of bigger size and are all located in the Kutch region of the state. The Mudhvay sub-block B, C and D have estimated reserves of 301 mt, 325 mt and 125 mt, respectively. The state is entitled to receive total revenue of `16,202 crore revenue including royalty and contribution towards DMF and NMET over a period of 50 years of lease period.

However, two other limestone mines — Madhvay sub-block A and Goyala — located in the Kutch region, have received no bids in the first two attempts. While Madhvay Sub-block A has an estimated reserve of 264 mt, the Goyala block has just a 68 mt reserve. The reason for failure of the first one is also baffling for government officials.

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. 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).

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