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Ministry of Mines Announces Record Number of Auctions for Mineral Blocks in FY 2022-23

Apr 03, 2023, 06:12 pm

The Ministry of Mines has announced a record number of 105 auctions of mineral blocks (ML-53, CL-52) during the financial year 2022-23 across various major mineral states, leading the total tally to 259 auctions since the introduction of the auction regime in 2015. Among the States, Madhya Pradesh lead the way during 2022-23 recording 29 auctions and Iron Ore emerged as the mineral with the highest number of auctions with 33 during this year. These auctions were for mining leases as well as composite licenses for all categories of minerals, including low-value minerals, medium-value minerals, high-value minerals, critical minerals, and precious metals and stones.

The Mines and Minerals (Regulation and Development) Act, 1957 (MMDR Act, 1957) is the legal framework that governs the development and regulation of mines and minerals in India. Effective from 12.01.2015, the MMDR Amendment Act, 2015 amended the MMDR Act, 1957.

The key feature of the amendment was the inclusion of a provision for awarding mineral concessions through auctions, replacing the previous "first-come-first-served" method. The objective of this amendment was to enhance transparency and eliminate any discretionary powers in the granting of mineral concessions at all levels. Additionally, the auction method guarantees the revenue generated from the auction mines accrued to the State Government.

The auction system incorporates two forms of concessions, namely mining leases (ML) and composite licenses (CL), which encompass prospecting licenses as well as mining leases.

The revenue generated from mining activities viz. royalty, contribution to District Mineral Foundation (DMF), auction premium, etc. accrues to the respective State Governments, whereas contribution to the National Mineral Exploration Trust (NMET) accrues to the Central Government. During the last 3 years, the State Governments accrued Rs. 39 thousand crores from royalty and 46 thousand from the auctioned mines in production. Further, funds to the tune of approx. Rs. 75 thousand crores were collected in DMF Fund and contribution towards NMET was approx. 37 hundred crores.

In 2021, a significant amendment was made to the MMDR Act through the MMDR (Amendment) Act, 2021, with the primary goal of ease of doing business, augmenting mineral production, and fostering employment opportunities in the mineral sector. The amendment incorporates provisions aimed at accelerating mineral exploration, auctioning mineral resources, and streamlining the process for mine operation, thereby enhancing production output. Additionally, the Minerals (Evidence of Mineral Contents) Amendment Rules, 2021 were subsequently enacted on June 18, 2021, which permit composite licenses for all minerals at the G4 level of exploration, replacing the previous mandate of G3 level exploration.

The recent amendments have significantly accelerated the pace of auctions, with the number of successful auctions increasing by four times. Prior to the 2021 amendments, 108 mineral blocks were auctioned during the first six years, whereas in the last two financial years, 151 successful auctions were conducted. The fiscal year 2022-23 has proven to be a landmark year in the history of auctions, with a record-breaking 105 mineral blocks (53 for mining leases and 52 for Composite Licenses) successfully auctioned across major mineral states. This has brought the total number of auctioned mineral blocks to 259 since the introduction of the auction regime. Of these, 193 are mining leases, while 66 are Composite Licenses.

Madhya Pradesh is at the forefront among State Governments in terms of mineral block auctions, having auctioned 29 blocks during the fiscal year 2022-23. Chhattisgarh follows closely with 20 auctions, while Karnataka and Andhra Pradesh are jointly ranked third with 11 auctions each.

In continuation, various blocks encompassing all categories of minerals such as Low Value, Medium Value, High Value, Critical, and Precious Metals and Stones were put up for bidding with the intention of awarding mineral concessions, including Mining Leases and Composite Licences. As of the financial year 2022-23, Iron Ore emerged as the mineral with the highest number of auctions with 33, followed by Limestone and Manganese with 20 and 18 auctions respectively. Additionally, 14 Bauxite blocks were also successfully auctioned, of which 11 were of metallurgical grade.

In the present year, strategic and critical minerals have been a focal point, and Chhattisgarh has successfully auctioned two blocks of Ni, Cr, and associated Platinum Group of Elements, as well as two blocks of Graphite. This accomplishment in the auction of crucial minerals represents a substantial advantage for the Atmanirbhar Bharat Abhiyan. Over the next 5-10 years, the country is expected to make significant contributions to the production of these minerals.

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