In contrast, for non-coal block auctions, the Mineral Auction Rules of 2015 mandate that a particular mine, or mines, may be reserved for specific end use. According to the model tender document, companies with installed plants are eligible for bidding. However, the document does not mention the requirement of capacity of end use plants.
"The skewed norms in Mineral Auction Rules, 2015 will lead to the concentration of ore in a few hands. Not only will this phenomena have an adverse effect on the balance iron ore, pellet and steel producers, but also lead to a manipulation of the market and pricing, thereby hurting the consumers," said an industry source.
Besides, pellet and steel manufacturers, who lack captive iron ore
mines, will have to fall back on market sourcing, or expensive imports, to keep their operations afloat. However, such end use plants will lose the competitive edge and contribute to the escalation of steel prices.
Further, under sub-rule 5 (f) of Coal Blocks
Allocation Rules, 2017, the central government has the discretion to spell out the maximum number of coal blocks
that can be allocated to a company, or its subsidiaries, or associate companies. On the contrary, there is no cap on the allotment of mineral blocks or the amount of mineral resources. Successful bidders can take as many blocks at auctions provided they conform to the area limits listed under Section 6 (1) (b) of MMDR Act, 2015.
An official with a leading steel company said the anomalies in auction norms can be corrected with amendments in Mineral Auction Rules, 2015.
“In case of auctions of captive mineral blocks, a bidder may be considered eligible for bidding only if its 50 years requirement of mineral for specified end use plant is equal to, or more than, the resource of the mineral block plus resource already held by him. Moreover, the minimum capacity of mine may be pre-defined in the tender document and MDPA (Mine Development and Production Agreement) are made stringent so that a defaulting miner does not get away with a small penalty for the shortfall in production”, he said.
Data posted on the Mines ministry website says that 68 non-coal blocks have been put to online auctions (as on August 6)- a mix of 25 limestone, 24 iron ore, six bauxite, four gold, three graphite, three manganese, two copper and one diamond blocks. The combined valuation of the auctioned resources is pegged at Rs 2.46 trillion.