Mines Ministry to Amend the Mineral Auction Rules, 2015 within August: Secretary, Ministry of Mines

As an action on a long pending mining industry demand, the Union Mines Ministry has said that his department will bring out proposed draft changes to the Mineral Auction Rules, 2015 within August 2017. "This draft will be made to make mineral block auctions more effective thereby removing the small glitches highlighted by the bidders and industry associations at a meeting held last month," a top Ministry official informed.

“When we put it out on the net, there would be again an occasion to give in your suggestions,” said Mr Arun Kumar, secretary, Ministry of Mines while inaugurating ASSOCHAM India Mining Summit 2017.

On the issue of environment clearance, Mr Kumar informed that Mines Ministry has given 20-page suggestions on how the environment can be protected and rules can be made to expedite the mining process.

“So more with a view to streamline the procedure we have given those suggestions and we will be taking it up with the Ministry of Environment so that simplification and cutting down on delay should be passed on,” he said.

On the issues pertaining to change in definition of captive, he said that captive definition will stay for the existing leases but for auctions the Ministry will see how it can tweak the system legally to allow for a certain percentage of the minerals to be traded as well.

“I would like to say that captive as a definition for the existing leases has been put in the Act and I do not see, in the very short or medium term, the Act changing and therefore the definition of the captive will remain as it is,” said Mr Kumar.

“However for end use stipulations, which the states are putting now for auctions, we want to examine and see whether we can make it more flexible, because if you are getting an auction, you are paying for the material as per the terms of the auction,” he added.

Conceding that there is a need to focus more and speed up exploration, but it is not that dismal as has been pointed out. “The Government is very serious to accelerate exploration, we are well aware of those deficiencies and we are trying to address them.”

On the issue of number of blocks coming forth for auction and pricing, he said that pricing has been aggressive for 29 blocks in relation to the quantum of mineral which was on the block.

“That is the whole purpose of auctions, the industry chooses the price which they feel is fair to bid and I certainly cannot or anyone for that matter would not like to put a ceiling which would again tend to have issues of allegations of favouritism because everyone would be at that level and so the only way left then is to have a computer-generated lot, which again would not be very suitable for various reasons,” said Mr Kumar.

He said that Ministry of Mines is also concerned about speeding up the pace of auctions. “For that purpose, the Ministry has had various consultations, while some states like Karnataka, Rajasthan, Odisha, Gujarat have really rolled it out.”

Adding that the Ministry has identified the most-potential district in the states that have not rolled it out in the desired manner and has sent GSI (Geological Survey of India) and IBM officers to sit in those districts and make out blocks.

“We will have a report by September and with that data, the state government will be more responsive, so against 21 blocks auctioned out by the end of March, by this approach, we hope to achieve the target of having 100 blocks auctioned in 2017-18,” further said Mr Kumar.

More so, as with a report, map and co-ordinates, the state bureaucracy would find it very difficult to say that there is no data availability.

“As and when more blocks come-in, there would be more fair competition and more reasonable bids,” he added.

Talking about the issue of 2020, he said that Union Ministry held discussion with the states on June 2 and had asked the states to give a plan of action by September.

“We would be insisting that the existing leases, do their exploration, give those reports and we would be requesting the states to see that those blocks are auctioned out before January 1, 2020 and formalities which need to be done can be taken in hand for a smooth transition,” said the secretary.

He also said that though the Centre has overall responsibility for mineral administration, the actual administration takes place in the states as the minerals belong to them. “So, subject to state government clearances, we are very open to notifying additional limits under 6(1)(b).”

On the issue of price control, he said “I think, industry should realise that there can be no artificial way in which prices should be controlled because it is going to be an auction scenario and the person who had bid for the auction has bid on the open market expectations.”

He added, “There is no scarcity, there is enough material available and therefore I do not see a rationale for price controls.”

He also said that as far as major minerals are concerned, India is a net exporting country and shall continue in this regard.