India (Commonwealth Union)_The government’s plethora of legislative actions over the previous seven years has streamlined the nation’s mine auction procedure. To strengthen the procedure and improve responsiveness in bidding, further work must be done. As an example, of the 108 mineral blocks that have been placed up for auction so far, more than 50% have had to be canceled because there was either no bidding activity or there were fewer offers than the required minimum of three.
Auctions were used as a mechanism for allocating mineral resources for prospecting and mining with the amending of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), which took effect in March 2015. A state government may auction off a mineral concession in accordance with rules that have been made public under the Act. There have also been auctions for a lesser number of other minerals, including gold, graphite, chromite, copper, and diamond. More than 80% of these blocks are for mining leases, while the remaining 20% are for composite licenses, which call for initial area research before beginning mining operations.
In the last seven years, changes have been made to the Act and the regulations to improve auction participation and facilitate a quicker transfer of mining rights. In the last three to four years, the process has gathered momentum, and several states have joined the fight. The premiums charged at auction have ranged from 5% to 452% of the sale price of a mineral as reported by the Indian Bureau of Mines. The most aggressive bidding was seen for iron ore, with average premiums exceeding 100% of the sale price. However, because of the more significant problem of obtaining statutory approvals, more than 75% of the auctioned blocks have not yet been built.
