‘We expect auction process for 50 mines to begin by year end’

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Published: December 17, 2015 12:05:54 AM

Balvinder Kumar, an IAS officer of the 1981 batch, took over as mines secretary in July this year, soon after the Mines and Mineral (Development and Regulation) Amendment Act...

Balvinder Kumar, an IAS officer of the 1981 batch, took over as mines secretary in July this year, soon after the Mines and Mineral (Development and Regulation) Amendment Act came into being, paving the way for the introduction of the auction system for the allocation of mines. His task is cut out. In an interview with FE’s Surya Sarathi Ray, he shares the progress so far in implementing the new regime for allocation of mineral resources:
An ordinance (for the auction of four chief minerals) was promulgated in January. Almost a year has since passed, but no auction of mines has taken place so far. Why has the progress been slow?

Six states — Karnataka, Chhattisgarh, Rajasthan, Maharshtra, Jharkhand and Gujarat — have issued notice inviting tenders (NITs) for 31 blocks to be allocated through the auction route. NITs are also expected to be issued for another 19. So we expect, by the end of the year, the process for auctioning would begin for around 50 mines. Another 15 mines would be put up for auction in January or by the middle of February.

We have made rules, prepared NIT documents and guidelines, done handholding for certain states. All these took some time, but the process has now begun.

Are states cooperating with the Centre in this endeavour?

Certain states like Rajasthan are not meeting our expectations. Rajasthan has got 20 mines to be put  up for auction, but has started the process in respect of only three mines so far. Odisha has 10-12 blocks, but they have not started the process yet. However, there are states like Maharashtra, Gujarat and Chhattisgarh which are very pro-active.

Does the crash in prices of iron ore and other minerals dampen investor enthusiasm?

The mines that are to be allocated through the auction route are for 50 years. So, definitely, people will take the long-term perspective of metal prices. Limestone and iron ore mines have been reserved for captive use. So naturally, cement firms and steels plants will take part. I think people would not come forward because of the current depression in the primary commodities market.

When are the actual allocations likely?

It will take another two months, possibly by February-end.

You had written to all states regarding the auction of minor minerals as well. Will there be separate rules for these?

Yes. We have asked states to frame rules for minor minerals on the pattern of the major minerals. Yesterday, we had a meeting with all bureaucrats of nine states. They told us that they are in the advanced stages of framing rules. People have either put draft rules for public comment or have already notified these rules.

Is there any proposal to further amend the MMDR (Amendment) Act, 2015?

Yes, only in the case of transferability. Under the Act, mines’ transfer will be possible only for mines which have been gotten through the auction route and not for the existing mines. We have received many representations from the mining industry saying that exemptions should be made for captive mines. Because if there are mergers or acquisitions, or sale of plants, then mines should also go along with the plant. We are moving for the amendment of the Act. It is basically for limited purposes.

Is there any change likely in the draft exploration policy?

We have consulted with different states and industry associations. We have sought public views on this. Now, we will try to finalise the policy as soon as possible. So far, we have not yet decided what could be incorporated in the final policy. But, certainly, there may be some addition.

Is there any recent development on the stake sell in BALCO and HZL?

Till date, the disinvestment of these firms are struck. In the case of BALCO, we have referred the matter to the attorney general. Issues are still pending with the department of disinvestment (DoD) with regard to HZL. Moreover, the primary commodity market is so depressed that we are not very sure about the response if the shares are disinvested at this stage. However, the final view will be taken by the DoD. They are the final authority.

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