BHUBANESWAR: Clearing the decks for auction of eight non-ferrous mines, the State Government is all set to float tender notice on July 31 for the invitation of bids for grant of mining lease of graphite, limestone and chromite blocks.
Of the eight blocks, six are virgin and two merchant mines. Geological reports of the blocks were scrutinised and value of mineral reserve estimated by SBI Capital Markets Ltd, the transaction adviser. Lease of the two chromite blocks located in Jajpur district will expire by March 31, 2020.
The SBI Caps is reported to have suggested to the State Government to set the reserve price for each of the mineral blocks lined up for auctions at five per cent.
As leases of 24 merchant mines including 16 iron ore blocks are set to expire by end of March next year, the Centre, as well as the steel industries, are putting pressure on the State Government to complete the auction process to ensure a steady flow of raw materials to mineral industries.
“The Directorate of Mines of the Steel and Mines department has planned to float tenders for 36 mining blocks including 12 virgin ones in three phases. In the first phase, notice inviting tenders for eight blocks will be made available on the MSTC website on July 31. The dates for bidding for the remaining blocks are August 14 and 31,” said sources familiar with the development.
Raising doubt over the success of auctioning of the eight mineral blocks, industry sources said all the four limestone blocks are very small in size. With limited reserve, bidders may not show interest for captive use. With no cement factory located near the four blocks, it will be a costly affair for merchant miners.
“Transportation of limestone, a basic raw material for the cement factory, beyond 20 km will not be viable as the cost of production will go up substantially,” sources in the cement industry said.
The State Government had put Garramura limestone block in Nuapada district to auction earlier but it had to defer the bid as there was no response to its invitation.
Refusing to divulge the proposed auction of the eight mineral blocks, Steel and Mines Minister Prafulla Mallick said, “We are trying our best to put a few blocks for auction. The SBI Caps has been asked to clear the geological reports of as many blocks as possible. Let’s see how many mining blocks will be ready.”
Mallick recently informed the Assembly that 40 mining blocks have been readied for auction during the current financial year. He said the Government, which had auctioned five mineral blocks including three iron ore ones as per Mineral Auction Rules, 2015 by May 2017, could not proceed with e-auction in 2017-18 due to the restriction imposed by the Delhi High Court.