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There will be no free lunches for public sector undertakings (PSUs) wanting to acquire mines for exploration of minerals, said officials from the Mines Ministry here on Thursday.
The MMDR Act permits State Governments to reserve a certain area for an interested public sector enterprise. “But, do not be under the impression that if a PSU takes part through the reservation route that they will not have to pay. The amount will be notified to the respective company,” Anup Pujari, Mines Secretary.
The Secretary was speaking at a press conference called by the Mines Minister, Narendra Singh Tomar, to announce the winners of the National Geoscience Awards.
Once the states have reserved the areas for their entities, it will require the Centre’s approval. After the process is completed, the reserved area can be granted to the public sector in the particular State.
While the Centre had earlier allowed entities such as NMDC, MOIL and SAIL among others, to undertake mineral exploration, those using the provision for reservation as per the MMDR Act would have to pay as they would if they went through the auction process.
“We’ve increased the scope for exploration beyond just the Geographical Survey of India (GSI) and Mineral Exploration Corporation Ltd. (MECL) to the interested State PSUs for which we will be issuing the suitable notification. They are welcome to participate in the auction process but there is another route, through reservations, that’s also available,” he said.
The Centre had allowed State-run entities to participate in the exploration process to enhance capacity and due to dissatisfaction with the work done by the GSI, MECL and State Directorates of Mining. “Such a move will help us realise better revenues during the auctions,” he said.
The Minister said that the rules and regulations for the auction of major minerals such as iron ore and manganese ore will be finalised shortly. Proposed rules have been sent to states and consultations are expected to take place sometime this week before firming them up, he added.
The rules are key to the auctions and the Government has nominated investment banker SBI Caps to suggest rules for auctions as well as bidding parameters. Uncertainty over reserve estimates could prove a deterrent for bidding, Pujari said, wait for the rules to be notified.
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