Govt sets tough terms for fresh auction of 20 mines

In case of failure to achieve the production target as per the MDPA, the lessee will be debarred from participating in future action for three years, the department said.

Published: 04th December 2019 02:46 AM  |   Last Updated: 04th December 2019 08:48 AM   |  A+A-

Express News Service

BHUBANESWAR:  After annulling the auction process for 29 mines including 9 virgin blocks for grant of mining leases, the State Government has decided to put tough conditions in tender document before initiating fresh auction for 20 operational mines, leases of which will expire on March 31, 2020. The Steel and Mines department has directed the Director of Mines to make appropriate amendments in the tender documents to prevent multiple bidding by a company through its affiliates for a single block.

“A bidder shall submit only one bid for particular mineral block. In case, a bidder submits more than one bid for a particular mineral block, either directly or indirectly, through its affiliates, such bids will be rejected,” said a letter from the department.The decision was taken on the basis of discussions held in the recent meetings of the Technical Evaluation Committee (TEC) and the High Level Committee (HLC). The other condition to be imposed in the tender document will be hard to attain by the successful bidders. 

“In case of clearance/approvals are available to the new lessee, the successful bidder will be bound to produce at least 80 per cent of the average actual production of the mine for the preceding two years in the first two years of (getting) the mining lease and this will be incorporated in the MDPA (Mine Development and Production Agreement) as production target,” the letter said.

In case of failure to achieve the production target as per the MDPA, the lessee will be debarred from participating in future action for three years, the department said. Further, the new lessee will not be approved environmental clearance or mining plan for production.However, these provisions may be relaxed if the State Government is satisfied that the shortfall in the production is entirely for reasons beyond the control of the lessee.

In case of mineral blocks reserved for end-use, the captive consumption will be limited to the plant of the bidder within the country.“The State Government may impose such other conditions in the MDPA, lease or letter of intent in the interest of the mineral development and in public interest,” the letter said.

The auction process for the nine virgin mineral blocks notified on October 18 but scrapped by the department will be scheduled subsequently.The State Government will invite fresh tenders for the 20 mines on December 6 and the last date for sale of tender document is December 30, the official said. Letter of intent will be issued to successful bidders by the end February 2020.

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