Lok Sabha Question No. 52 (UNSTARRED), answered on 2017-02-02
Subject: Review of Auction System of Mines
Ministry: MINES
Asked by: PONNUSAMY VENUGOPAL

## GOVERNMENT OF INDIA MINISTRY OF MINES LOK SABHA UNSTARRED QUESTION NO.52 TO BE ANSWERED ON 02 ND  FEBURARY, 2017

'Review of Auction System of Mines'

## 52 . DR. P. VENUGOPAL :

Will the Minister of MINES be pleased to state:

- (a) whether Federation of India Mineral Industries has requested in-principle nod for mines before auction, if so, the details thereof and the reasons therefor;
- (b) whether any suggestions have been received to analyse and review the existing auctioning system in terms of reserve price, quality of exploration data and hastening the process for statutory clearances besides non linkage with the end use industry, if so, the details thereof; and
- (c) the action taken/to be taken by the Government in this regard?

## ANSWER

## THE MINISTER OF STATE (INDEPENDENT  CHARGE)  FOR POWER,  COAL, NEW  & RENEWABLE ENERGY AND MINES (SHRI PIYUSH GOYAL)

(a) to (c): Suggestions have been received from the Federation of Indian Mineral Industries ( FIMI )  for  a  larger  and  active  participation  in  the  auctioning  of  the  mineral  blocks.  In  this regard,  FIMI  has  suggested  that  there  is  a  need  to  analyse  and  review  the  existing auctioning  system  particularly  in  terms  of  reserve  price,  quality  of  exploration  data  and assurance for hastening the process for statutory clearances besides non-linkage with the end use industry.

The two stage bidding procedure as laid down in the Mineral (Auction) Rules, 2015, is a dynamic process with in built solutions for each possible eventuality, including the lack of requisite number of bidders. In the event of not getting the requisite number of technically qualified  bidders even after two rounds of auction, the state government is empowered to continue  the  bidding  process,  in  the  third  and  subsequent  round,  without  meeting  the requirement of three minimum bids.

For quality of exploration  data the MMDR  Act,  1957,  explicitly provides  for establishment  of  mineralization  before  grant  of  mineral  concessions  in  terms  with  the parameters prescribed in the Minerals (Evidence of Mineral Contents) Rules, 2015. Where the evidence of mineralization is not of the prescribed standard, the MMDR Act provides for grant of a 'prospecting licence-cum-mining lease'.

To facilitate the concerned states to expedite various clearances/ approvals required for  making operational the successfully auctioned getting mines, an inter-ministerial group has been set-up and is meeting regularly.

Reservation of mineral blocks for a particular end use is not mandatory condition and the  state  governments  at  their  discretion  may  reserve  a  particular  mine  or  mines  for  any particular end use.

In accordance with the auction framework put in place by the Ministry of Mines, so far 21  mineral blocks with estimated value of  reserves  being  over  Rs.  93,000  Cr  have been auctioned  by  states.  Through  these  auctions,  states  are  expected  to  get  an  additional revenue of over Rs. 57,500 Cr during the lease period. Results of auction so far validate the auction procedure put in place. Hence, the Ministry does not intend to amend the provisions of the MMDR Act, 1957, with regard to any of the provisions above.