e-auction to boost coffers

In its report dated September 21, on issues related to survey, demarcation and e-auctioning in Bellary, Chitradurga and Tumkur, the CEC has stressed that Karnataka stick to the e-auctioning process, which was initiated on September 14 in a bid to sell 25 million MT of stocked ore in the three districts.

According to a letter dated September 19 submitted to CEC by the director, mines and geology during 2010-11, an amount of Rs 434.76 crore was received by Karnataka as royalty for the sale of 33.75 million MT of ore. The average rate of the royalty was Rs 129 per MT.

“As against this, Karnataka will earn an additional revenue of Rs 340 per MT of ore sold through e-auctioning. The royalty receivable (Rs 850 crore) by Karnataka for 25 million MT ore, may exceed the total royalty received by it for the sale of ore in 2010-11. Hence, mining operations have been ceased except in two mining leases of NMDC Ltd, hoping that Karnataka may not lose its revenue through royalty,” the report states.

The CEC states that in the first e-auction, out of 99 lots comprising 0.396 million MT of iron ore, 68 lots comprising 0.272 million MT of ore, worth Rs 92.69 crore (at an average rate of Rs 3,400 per MT), have been sold.

The rate is 13.48 per cent above the reserved price of the lots.  “The remaining 31 lots comprising 0.124 million MT of ore were not sold as nobody offered bids at reserved price or above. Also, the lots are mostly located in the interiors and therefore found no attractive buyers. MSTC Ltd has suggested that these lots be shifted nearer to the highway or to reduce the reserved price,” it adds.

CEC feels that in the coming weeks, the level of participation in the e-auction may increase.


CEC recommendations
When the apex court allows for mining operations to start, the ore lifted should be sold through e-auction to bring about transparency, stalling underpayment of royalty, curbing sale of illegally mined ore, and putting a stop to excess production of ore.

 Mining to be allowed in leases (found to be involved in illegal mining) only after the damaged area is physically reclaimed and rehabilitated.

Karnataka should cancel leases of mining companies found to be involved in substantial illegal mining

NMDC can continue operations in ML Nos 2396 and 1111 only if the entire production is sold through e-auction