Karnataka to e-auction leases for 11 C-category mines in February 2016

By: | Published: December 3, 2015 3:20 AM

Almost 31 months after the Supreme Court direction for re-allotment of 'C' category iron ore mining leases to end users, the Karnataka government has set the ball rolling for the auction of 11 such leases.

Almost 31 months after the Supreme Court direction for re-allotment of ‘C’ category iron ore mining leases to end users, the Karnataka government has set the ball rolling for the auction of 11 such leases.

The department of mines and geology, government of Karnataka, has invited bids from end-users for e-auction of 11 out of 51 ‘C’ category leases in Ballari and Chitradurga districts. These 11 mines together have around 127 million tonne (MT) of iron ore reserves.

“In exercise of the powers conferred by Section 10(B) of the Mines and Minerals (Development and Regulation) Act, 1957 and in accordance with the Mineral (Auction) rules, 2015 notified there under, the government of Karnataka has identified 15 category ‘C’ iron ore mines for electronic auction for grant of mining lease,” the department of mines and geology said in a notification. Of these, 11 mines will be auctioned to end users engaged in the manufacture of steel, sponge iron, pig iron and pellets, the notification added.

The apex court, in its final order on illegal mining in Karnataka pronounced in April 2013, had directed the state government to cancel 51 C-category leases for involving in rampant illegal mining and re-allot them to end users through a transparent bidding mechanism.

The state-owned MSTC Ltd will conduct electronic auction between February 9 and 11, 2016 for 11 mining leases.

The successful bidder will be handed over with the letter of intent by state government by March 21, 2016. The financial and technical bids are to be submitted online, the department said in a notification.

The notification, however, added that a consortium of end users is not eligible to participate in the auction. The auction is also open for public sector undertakings.

This is expected to generate huge interest among steel mills like JSW Steel, and public sector pellet maker KIOCL.

Both are operating in the state without their own captive mines. Others like Arcelor Mittal, which is in the process of setting up a 6 MT-per-annum steel plant in Ballari district, is eagerly waiting for raw material linkage.

The last date for purchase of tender document is December 16 and submission of technical bids plus the initial price offer on the website of MSTC Ltd is January 18, 2016. The state government has invited applications from the end users for the allotment of 11 mines in the first phase between February 9 and 12.

The 11 mining leases are: Two leases of Tungabhadra Minerals Pvt Ltd; Channakeshava Reddy; Nidhi Mining Company; Rama Rao Poal; M Srinivasalu Mines; S B Minerals; V S Lad & Sons; Ramgad Mines & Minerals Pvt Ltd; Lakshminarayan Mining Co.; and B R Yogendranath Singh.

Currently, 24 mining leases are producing an average 21 million tonne (MT) of iron ore in the state of Karnataka, while the requirement of iron ore by steel mills in and around the state is estimated at 35 MT. This includes two mining leases of state-owned NMDC Ltd.

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