India to auction 100 mineral blocks by Nov this year

The Dollar Business Bureau

The government will auction 100 potential mineral blocks of 100 sq km area each by November 2016, a decision that will enhance India’s potential of mining.

This decision comes after the approval of the new National Mineral Exploration Policy (NMEP) by the government last week, in order to attract more foreign direct investment (FDI) in the sector.

“Geological Survey of India (GSI) has identified 100 blocks. SBI CAP is working on the auction modalities for these blocks and will submit its report in 2-3 months,” Narendra Singh Tomar, Union Minister of Steel, Mines, Labour and Employment, told journalists at the 1st conclave on National Minerals & Mining held in Raipur.

On the question of time line, the Minister said that the process for the auction will begin in the coming 4-5 months.

He said that the new policy is based on revenue sharing model to motivate participation from private players and attract FDI. An amount of Rs.2,116 crore will also be required for the implementation.

Tomar stressed on the need to enhance participation from private players and urged them to come forward. “The country has about 8 lakh sq km of potential mining area but just 9-10 percent has been explored. GSI and MECL are the two government bodies, which are into exploration but they have a limited capacity.

The minister also prodded the mining industry to allot 10 percent from their profits for mineral exploration work, so that exact potential of the country’s mineral resources can be utilised. For this, potential blocks/areas for regional exploration will be identified/earmarked for auction by the government.

On auctioning of mines, Tomar said that the states have auctioned 7 mines till date, having mineral reserves amounting to about Rs.29,000 crore. The revenue to be earned from these mines will be above Rs.13,000 crore, over the next 50 years.

NMEP recommends that private players involved in carrying out regional and detailed mine exploration will be provided with a particular share in the revenues (with regards to royalty or premium to be accrued to the state government) from mining process from the bid winner post e-auction of mineral blocks.