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None of the minerals-rich States may be ready for the first round of auctioning of non-coal major minerals by December.
The Centre had earlier set the year-end deadline for kick-starting the auction process for around 100 blocks of iron-ore, bauxite, manganese and limestone.
Following continuous interaction with the States, including Odisha, Jharkhand, Chhattisgarh, Madhya Pradesh, Karnataka, Maharashtra and Rajasthan, the Union Ministry of Mines in June pared down the number to 78 blocks, which could be ready for auction by December.
Bottlenecks However, according to sources, it now appears that none of the blocks will come under hammer in December.
“There are various issues blocking the preparations for competitive bidding,” a source said.
According to EY, the States are finding it difficult to get the global positioning system coordinates to demarcate the boundaries for the blocks.
Though the Union Mines Ministry sources declined to comment, industry observers said slowing down of the auction process over the alleged mining scam in Rajasthan, and lack of estimates on residual reserves in nine Karnataka iron-ore mines directed for auction by the Karnataka High Court, have also been a setback for the Centre’s initiative.
The creation of District Mineral Funds in States, meant to be a parallel exercise, had also been slow, sources pointed out.
As in the proposed competitive bidding process the minerals possessing States have been made revenue sharing partners with the miners, the onus lay on the States to prepare for the auctions. Centre had also agreed to help some States organise auctions.
Warning against haste However, EY in a recent report has warned against rushing with the auction of mineral blocks for which geo-technical data for arriving at a realisable value are insufficient. There were areas that need re-evaluation from a risk-sharing perspective to make them workable, said Anjani K Agarwal, Partner at National Metal & Mining Leader, EY.
He suggested review of the key issues such as the end use and disposal conditions, allocation of licences to government companies, future stability on taxes and levies, auction of composite licenses, non-exclusive reconnaissance permits, merchant miners’ participation, access to block-related infrastructure and transfer of mining concessions.
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