The government of the coastal Indian state of Goa which has initiated the auction process of four iron ore blocks has fixed minimum reserve prices for the bidding for the assets, government officials said on Tuesday, October 25.
According to the sources, in the case of one iron ore block in south Goa, the minimum reserve price has been fixed at 25 percent and for the three in north Goa it has been set at 15 percent.
The Indian Bureau of Mines (IBM) periodically sets the iron ore prices for mines in Goa. So, in case of the mine up for auction in south Goa, if the assumed prevailing IBM price of iron ore is INR 100/mt, the winning bid has to be a minimum of INR 25/mt or above. Similarly, any winning bid in the case of the mines in north Goa will need to be INR 15/mt or above.
The winning bidder will have to pay the Goa government at this rate on every metric ton of iron ore exported from these mines under the revenue sharing agreement that will be signed between the winning bidder and the government, the sources explained.
The estimated iron ore reserves at the three north Goa mines are 9 million mt, 23 million mt and 85 million mt, while the block in the south has estimated reserves of 20 million mt.
The officials said that the government is expected to complete the auction process and announce the winning bids by December 21.
Iron ore mining in Goa had come to a standstill since March 2018 after the Supreme Court ruled that lease renewals done for 88 mines in the state without adopting the auction process were illegal.