New Delhi, Feb 19 :The rules and regulations for the auction of major minerals like iron ore and manganese ore will be finalised by May this year, Mines and Steel Minister Narendra Singh Tomar said here on Thursday.
"The rules and papers for mines auction will be readied by May. Then these will be sent to the states," Tomar said at an event organised by PHD Chamber of Commerce.
Since mines is a state subject, auctioning of mines will be conducted by states in which the role of the Centre would be limited to framing the rules to be followed in the process.
Mines and Minerals (Development and Regulation) Amendment Ordinance, 2015, promulgated by the President in the second week of January, empowers the Centre to prescribe terms and conditions and procedure for bidding which include production sharing or royalty payment or a combination of both.
The government is yet to finalise which of the option is to be taken for granting leases. The framing of the rules is thus crucial for the initiation of the auction of the mines. Sources said government has roped in investment banker SBI Capital Markets to suggest rules for auctions as well as the bidding parameters.
It has already submitted the draft to the mines and steel ministry which would be finalised after discussions with stakeholders.
The ministry has identified 199 mines containing minerals like iron ore, bauxite and manganese ore that can be allocated through the auction route. These are located in mineral-rich states such as Karnataka, Madhya Pradesh, Odisha, Gujarat and Maharashtra and contain minerals such as iron ore, bauxite, limestone and manganese ore.
Tomar said the government aims to begin auction process as soon as possible and exuded hope that the ordinance would be taken up in the forthcoming session of Parliament.
Meanwhile, inviting public, private and foreign firms to take part in mines exploration, which is currently being done by two state-run firms only, the minister said investment made by them would be refunded if the concerned party does not get the mine through the auction route.
The government has also decided to notify state-run firms with experience in mining activity such as NMDC and SAIL to carry out exploration activity. Aimed at enhancing exploration capacity, the decision is likely to spur the slow exploration work that has been holding back the potential of the sector.