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GoM suggests competitive bidding for direct prospecting in mineralised areas

18 Jul 2011 Evaluate

Under the pressure of state governments, the Group of Ministers (GoM) headed by Finance Minister, has recommended competitive bidding for direct prospecting in mineralised areas. This recommendation made by GoM would seal the mines ministry’s proposal, which envisaged granting mining concession in unknown mineralised areas on the first-in-time basis.

In the last meeting GoM has acknowledged the concerns raised by the Chief Minister of Chhattisgarh Raman Singh and Chief Minister of Orissa Naveen Patnaik, on the need for inserting suitable provisions in the Mines and Minerals (Development & Regulation) Bill 2011, which would not deprive their administrations of revenue to be accrued from the grant of mineral concessions.

Chhattisgarh CM had raised his concern on the first-in-time methodology that it would trigger a mad rush by applicants, in response to this concern, the group of minister has seceded that “all applications pending on the date of commencement of the new Act would be deemed to be lapsed (barring those awaiting seamless transition, or the ones which have secured prior approval for grant of concession).” The state government should be given a moratorium for receiving fresh applications for prospecting licenses the minutes said. The Mines minister Dinesh Patel in communication to Finance Minister had told that there should be no biding non-exclusive Reconnaissance Permit.

The GoM also have recommended setting up a floor price for competitive bidding, as this would promote participation of genuine players and attract more investment for the mining sector. However, on the issue of making mechanism and defining parameters on how to decide floor price, GoM has left the decision with state governments and miner ministry. The GoM also suggested increasing the time for disposal of request of prospecting licenses to four months.


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