Lok Sabha Question No. 1767 (UNSTARRED), answered on 2017-12-28
Subject: New Mineral Auction Rules
Ministry: MINES
Asked by: KULAMANI SAMAL

## GOVERNMENT OF INDIA MINISTRY OF MINES

## LOK SABHA UNSTARRED QUESTION NO.1767 TO BE ANSWERED ON 28 TH  DECEMBER, 2017

## New Mineral Auction Rules

## 1767.  DR. KULAMANI SAMAL:

Will the Minister of MINES be pleased to state:

- (a)  whether it is a fact that certain initiatives have been taken by the Government to  ease  the  auction  process  of  minerals  in  the  country  and  if  so,  the  details thereof;
- (b)  whether there was any flaw in the previous auction rules due to which it was difficult to attract the bidders and if so, the details thereof;
- (c)  the details of amendments made to the previous auction rules;
- (d)  whether only 33 blocks of different minerals have been successfully auctioned since May, 2015 after introduction of new mineral auction rules; and
- (e)  if  so,  the  details  thereof  indicating  the  mineral  blocks  and  the  successful bidders involved in the auction process?

## ANSWER

## THE  MINISTER  OF  STATE  FOR  MINES  (SHRI  HARIBHAI  PARTHIBHAI CHAUDHARY)

(a)  to  (c):  The  Mines  and  Minerals  (Development  and  Regulation)  ( MMDR )  Act, 1957 was amended through the MMDR Amendment Act, 2015 which deemed to have  come  into  effect  from  12th  January,  2015  .  One  of  the  most  important provisions of the MMDR Amendment Act, 2015 is the grant of mineral concessions, for major minerals, through auction by competitive bidding which is a transparent and  non-discriminatory  method  as  against  the  earlier  method  of  first-come-firstserve basis.

In pursuance of the MMDR Amendment Act 2015, the Central Government made  the  Mineral  (Auction)  Rules,  2015  which  were  published  in  the  Official Gazette  vide  notification  No.  G.S.R.  406(E)  dated  20.05.2015.  The  Ministry  of Mines extended handholding support to states to familiarize and facilitate them for rolling  out  the  transparent  auction  regime through agencies such as IBM, MECL, MECON, SBICAPS and MSTC. The Mineral (Auction) Rules, 2015 had served well since its notification and so far 33 mineral blocks have been successfully auctioned by various states. The Ministry is in regular consultation with the States to facilitate the  auction  process  and  to  address  any  difficulty.  It  was,  however,  felt  that  the provisions  of  these  rules  may  be  revisited  on  the  experience  gained  from  the working of these rules in the auction process in the past two years.

Accordingly, the Mineral (Auction) Rules, 2015 have been amended through the  Mineral  (Auction)  Amendment  Rules,  2017  to  make  the  auction  procedure simpler. The Mineral (Auction) Amendment Rules, 2017 have been published in the Official Gazette vide notification No. G.S.R.1469 (E) dated 30.11.2017. The salient features of amended rules are given below:

- (i) Extending  the  applicability  of  Mineral  (Auction)  Rules,  2015  to  the minerals specified in Part B of the First Schedule to the  MMDR Act having  grade  below  the  threshold  value  as  prescribed  under  the Atomic Minerals Concession Rules, 2016.
- (ii) Allowing  the  end  users  to  sale  the  mineral  equivalent  to  twenty  five percent of total mineral excavated in the previous financial year, for which the end use was specified.
- (iii) Providing  relaxation  to  the  state  governments  in  auction  process  by allowing  them  to  continue  with  even  less  than  three  technically qualified  bidders  in  the  second  attempt.  Under  the  old  rules  the process of auction was annulled if there are less than 3 bidders and this process used to be carried out for at least for 3 rounds. Now with the amended rules, while a minimum of 3 bidders is still stipulated in first attempt of auction, the states have the flexibility of allocating the block in the 2 nd round itself even if there are less than 3 bidders.
- (iv) Incorporation  of  the  provisions  for  executing  the  mining  lease  deed within three years which is extendable upto a maximum period of five years.
- (v) Relaxing the eligibility criteria for bidders in respect of mining lease as well  as  the  composite  licence.  Reduction  in  the  requirement  of  net worth  for  the  prospective  bidders.  In  practical  terms  for  an  average annual production of up to Rs. 2 Crore, the net worth required was Rs. 4  Crore,  which  is  reduced  to  Rs.0.5  Crore.  For  an  average  annual production up to Rs. 20 Crore the net worth required was Rs. 40 Crore which has been reduced to Rs. 10 Crore.
- (vi) The  amended  rules  have  also  provided  adjustment  of  the  upfront premium  to  be  adjusted  against  the  due  payments  of  miner  at  the earliest.

(d)  to  (e):  Total  33  blocks  of  different  minerals  have  been  auctioned  since  May 2015. The details of auction of these blocks are at Annexure .

***

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## Details of Mineral Blocks & their successful bidders as per information received from the State Governments

|   S No | State          | Mineral Block                                                     | Successful Bidder               |
|--------|----------------|-------------------------------------------------------------------|---------------------------------|
|      1 | Andhra Pradesh | Gudipadu                                                          | Penna Cements                   |
|      2 | Andhra Pradesh | Erragudi- Hussainapuram -Yanakandla                               | Sree Jayajothi Cements Pvt Ltd. |
|      3 | Andhra Pradesh | Nandavaram -Venkatapuram                                          | Sree Jayajothi Cements Pvt Ltd. |
|      4 | Chhattisgarh   | Baghmara, Balodabazar-Bhatapara                                   | Vedanta Ltd.                    |
|      5 | Chhattisgarh   | Kesla, Raipur                                                     | Century Cement                  |
|      6 | Chhattisgarh   | Karhi Chandi, Balodabazar-Bhatapara                               | Shree Cement                    |
|      7 | Chhattisgarh   | Kesla- II, Raipur                                                 | Dalmia (Bharat) Cement          |
|      8 | Jharkhand      | Hariharpura Lem-Bicha Block I, Ramgarh                            | Burnpur Cement plant            |
|      9 | Jharkhand      | Hariharpura Lem-Bicha Block II, Ramgarh                           | Burnpur Cement plant            |
|     10 | Jharkhand      | Pahadia, Singhbum West                                            | Maithan Ispat Ltd.              |
|     11 | Jharkhand      | Parasi Gold and Associated Minerals, Tamar Block, District Ranchi | Rungta Mines Ltd.               |
|     12 | Odisha         | Kottameta, Malkangiri                                             | Dalmia Cements (Bharat)         |
|     13 | Odisha         | Lasarda-Pacheri, Kendujhar                                        | Thriveni Earth Movers Pvt Ltd.  |
|     14 | Odisha         | Ghoraburhani- sagasahi, Sundargarh                                | Essar Steel                     |
|     15 | Odisha         | Kalamang West (Northern Part) , Sundergarh                        | Bhushan Steel Ltd.              |
|     16 | Odisha         | Netrabandha Pahar, Sundargarh                                     | Bhushan Power& Steel Ltd.       |
|     17 | Rajasthan      | Sindwari, Ramkhera, Satkhanda Block- B, Chittaurgarh              | Dalmia Cement (Bharat)          |
|     18 | Rajasthan      | 3B1-(a) n/v Deh of tehsil JayalDistrict Nagaur                    | Emami Cement                    |
|     19 | Rajasthan      | 3B1-(b) n/v Deh of tehsil JayalDistrict                           | Emami Cement                    |

| 20   |                | Nagaur                                                                |                             |
|------|----------------|-----------------------------------------------------------------------|-----------------------------|
|      |                | District Nagaur Rama Rao Paol, ML. No. 2621, Ramgad,                  | JSW Ltd.                    |
| 21   |                | Bellary                                                               |                             |
| 22   |                | M/s Lakshminaayan Mining company, ML. NO. 2487, Karadikolla, Bellary  | MSPL Ltd.                   |
| 23   |                | M/s Tungabhadra Minerals Pvt. Ltd. ML. No. 2365, Ittanahalli, Bellary | JSW Ltd.                    |
| 24   | Karnataka      | M/s Tungabhadra Minerals Pvt. Ltd. ML. No. 2366, Ittanahalli, Bellary | JSW Ltd.                    |
| 25   |                | Karthikeyas Manganese, ML No. 2559, Swamimalai range, Bellary         | MSPL Ltd.                   |
| 26   |                | Hothur Traders, ML No. 2313, Malgolla, Bellary                        | JSW Ltd.                    |
| 27   |                | V S Lad &Sons, ML. NO. 2290, Sandur, Bellary                          | JSW Ltd.                    |
| 28   | Madhya Pradesh | Hatupur Block, Brijpur, District- Panna                               | Bansal Construction Company |
| 29   | Gujarat        | Mudhvay Sub-block B, kachchh                                          | Shree Cement Ltd.           |
| 30   |                | Mudhvay Sub-block C, kachchh                                          | Adani Cementation Ltd.      |
| 31   |                | Mudhvay Sub-block D, kachchh                                          | JSW Cement Ltd.             |
| 32   |                | Chitale-Watangi, District Kohlapur                                    | Gamma Iron India Ltd.       |
| 33   | Maharashtra    | Nandgaon Ekodi, District Chandrapur                                   | Ambuja Cements Ltd.         |