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NEW DELHI(PTI): The Cabinet is likely to consider mines ministry’s proposal to allow auction of 100 mineral blocks for exploration as early as this week as the government tries to revive exploration activity in the country.
Last month, Steel and Mines Minister Narendra Singh Tomar had said his ministry has identified 100 mineral blocks for exploration, which will be offered to the private sector once the government notifies National Mineral Exploration Policy (NMEP).
“The mines ministry has sent the proposal for auction of 100 blocks for probing deep-seated/concealed mineral deposits. It is likely to be taken up this week or the next. The government is committed to this as it will give a major boost to exploration in India,” a government official said.
The ministry has engaged SBI Capital, a wholly-owned subsidiary of public lender State Bank of India, as transaction advisor for the proposed auction. The state-owned metal scrap trading company MSTC has been roped in to set up the auction platform.
One of the important features in NMEP is attractive provisions for private investment in the exploration sector, he added. NMEP proposes that private entities engaged to carry out regional and detailed exploration will get a certain share in revenue (by way of royalty/premium to be accruing to the state) from mining operation from successful bidder after e-auction of mineral block discovery.
Revenue-sharing could be either in the form of a lumpsum or an annuity, to be paid throughout the period of mining lease, with transferable rights. Selection of private explorer is proposed to be done through a transparent process of competitive bidding through e-auction. For this, reasonable areas/blocks for regional exploration will be earmarked/identified by the government for auctioning.