States gearing up for second phase of mines auction in September

The industry does not seem very enthusiastic about limestone blocks, which they say could be owing to the slump in the cement market.

PTI September 05, 2016 16:19:34 IST
States gearing up for second phase of mines auction in September

After the industry's lukewarm response to the first phase of mines auction, states are gearing up for the second, which will see mines bearing minerals like gold, diamond and iron ore go under the hammer.

States gearing up for second phase of mines auction in September

Representational image. Reuters

Five states -- Karnataka, Andhra Pradesh, Madhya Pradesh, Rajasthan and Jharkhand -- will offer a total of 29 mines for the auction that will commence from the third week of this month, a senior government official said.

"This time, there are 14 iron ore mines, 12 blocks of limestone and 1 block each of gold, diamond and copper," the official added.

According to analysts, there will be good response for iron ore mines, and gold and diamond too will see interest.

However, the industry does not seem very enthusiastic about limestone blocks, which they say could be owing to the slump in the cement market.

"Though cement market seems to be reviving, there does not seem much interest from the industry. Companies do not seem to be very active in bidding for the blocks," a senior official from a cement firm said.

During the first round held in the last financial year, states offered nearly 47 mines bearing minerals such as gold, iron ore, bauxite and limestone.

States were able to auction 7 mines in the first phase with mineral reserves worth about Rs 29,000 crore. The revenue to accrue from these mines over the next 50 years will be more than Rs 13,000 crore.

Of this, 17 blocks could not be sold due to insufficient number of initial bids on account of factors such as quantity and grade of ore, quality of the mineralisation studies, land ownership pattern, dull market scenario and end-use conditions imposed by states.

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