37 more 'C' category mines to be put on auction block

e-auction notified for 14 mines spread across Ballari, Chitradurga

The State government, which opened up 14 ‘C’ category mines for lease through auction this week, is all set complete the exploration of iron ore reserves in the remaining 37 mines in next three months and complete the process of auctioning by January 17, 2017.

The Supreme Court had directed the State to lease out ‘C’ category mines in Ballari and neighbouring districts and accordingly, the department of Mines and Geology (DMG), on Tuesday, notified e-auctioning of 14 such mines. Of these, 12 are situated in Ballari district and two in Chitradurga districts.

These mines were earlier held by private parties and their lease had to be cancelled following rampant violation of mining norms.

This is said to be first-of-its-kind e-auctioning of mining leases in the country. Not only that, for the first time, only end-users of iron ore such as iron and steel makers, are allowed to bid for the mining leases this time.

The Mineral Exploration Corporation Limited, a government of India undertaking, has completed the exploration of iron ore reserves in these 14 mining blocks, according to DMG,  The exploration in the remaining 37 mines should be completed by next March, according to the Supreme Court direction.

The process of lease-cum-auction of all the 51 mines would have to be completed before January 17, 2017, said S S Pattanashetty, Director, DME.

“It would take three more months to complete the exploration process in all rest of the mining pits.  The exercise has been completed in 14 mines and the they have been put for auction on December 22. It took nearly six months to complete the work. There is a court mandate for us to complete the auctioning before January 17, 2017,” he said.

However, the Federation of India Mineral Industry (Fimi) is not happy with the process. It wanted all the 51 ‘C’ category mines to be auctioned.

Base price high

In addition, the base price  for bidding - 35 per cent of the total value of the iron reserve - is very high, according to Fimi South Director H M Khayyum Ali.

Ali said: “The government, as per the court order, should have leased out the mines in April last. The base price of 35 pc is very high when there is hardly any demand for iron ore in international market. China has stopped importing ores due to economic recession. The price was fixed last year. In other mining states, the base price is kept at 5 pc.”

Mining activities have to a standstill from the last two years, except in the case of 29 mines of ‘A’ and ‘B’ categories, which were cleared by the Central Empowered Committee appointed by the Supreme Court.

The reclamation and rehabilitation plans for the 118 lessees have to be approved by the court. Mining would not resume on a full scale till such time, he added.