India Plans Competitive Bidding for Mineral Mining

After series of allegations rocked India’s mineral mining sector, the Mines Ministry has proposed competitive bidding mechanism for allocation of mines for all minerals.

The Ministry has put the draft amendments in the public domain and sought comments by December 10, 2014. The terms and conditions for the auction process will be given by the Central Government.

According to the draft, for bulk minerals such as iron ore, limestone, manganese, bauxite and others, there will be no requirement for a prospective licence and any gaps in the knowledge relating to such minerals will be filled by the State Government agencies. Such minerals, which will be notified at a later date, account for nearly 85 per cent of the country’s total mineral production.

For non-notified minerals, a combined prospecting-cum-mining licence will be given via competitive bidding process. The successful bidder will conduct the exploration and prospecting work at their own risk and cost. The bidders will also have to pay either a production share or payment linked to the royalty.