“In this fiscal, the tempo of auctions has accelerated as tenure of all merchant mining leases ends by March 31, 2020. These mines have to be readied for production again before their validity ends. The government is working on environment clearance, forestry clearance and an array of other approvals to ensure seamless transfer of ownership and continuity in operations," said an official with a standalone mining company.
Since the promulgation of MMDR Act 2015 and framing of Mineral Auction Rules, 70 mineral blocks
have been auctioned. The combined revenue to states from auctions of these blocks over the lease period spanning 50 years has been estimated at Rs 2.02 trillion, inclusive of royalty and contributions to the District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET).
In Odisha, the process of online auctions of 20 merchant leases- a mix of iron ore and manganese has taken off.
The deadline for bid submission is January 3, 2020. The conduct of ascending forward electronic auctions and submission of final price offer on the auction platform will be done between January 31 and February 21, 2020 while the Letter of Intent (LoI) is to be issued from February 10 to February 29, 2020.
The state government has inserted some additional conditions in the tenders for the expiring merchant mine leases.
A successful bidder after obtaining all statutory clearances needs to produce in the first two years at least 80 per cent of what the mine actually produced in the preceding two years. This clause will be inserted in the Mine Development and Production Agreement (MDPA). Failure to achieve this production benchmark will debar the successful bidder from participating in future auctions for three years. And, in case of blocks reserved for end use, the consumption should be limited to the plant of the bidder located within the country.