The Union mines ministry on Wednesday said that deliberations on fixing the financial and technical parameters for auction of iron ore and bauxite mining leases is underway and would soon approach the Union Cabinet for approval.
The ministry’s announcement followed finance minister Arun Jaitley’s address at the India Economic Summit where he announced that the government is working out a plan for auctioning iron ore, bauxite and other mines.
Jaitley said that the government was looking at ending discretion and bringing in fairness in allocation of mineral blocks, which has begun with the ordinance on coal blocks. “I can tell you with regard to other minerals we are about to undertake a similar reforms,” he said.
The Indian Express had reported on Wednesday that the government has finalised a list 31 mining leases for iron ore and bauxite mines to be auctioned by April 2015.
These mines have been fully explored and the quantum of mineralisation ascertained by state-run exploration agencies. With over 60,000 mining leases pending with the Central and state governments, the Union mines ministry is learnt to have decided to auction around 150 leases next year.
According to a blueprint drafted by the mines ministry, the bidders for the mining leases would be evaluated based on their experience, technical expertise, financial strength, required manpower, investment proposed by them, value addition proposals and finally the financial bids.
The government is likely to allow only those end users who have proposed to set up projects and have shown commitment towards their plans.
The financial bid will focus on a price discovery mechanism wherein the intrinsic value of the mineral would be captured through the discounted cash flow approach.
Source: The Indian Express
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