The Indian government has relaxed several norms for auctions of mineral blocks, including iron ore blocks, a government official said on Tuesday, December 5.
The official said that auction rules have been amended so that state governments in India can hold the auctions under a more ‘liberalized environment’ and ensure higher participation from investors.
One of the most significant relaxations concerns the requirement for at least three bidders for the auction process to be successful. While in the first round of bidding, a minimum of three bidders will be a prerequisite, the bidding process will be considered valid even if the number of bidders in the second round falls below three, the official said.
Secondly, the mandatory end-use requirement of an iron ore block allocated through the auction route has also been relaxed, the official added.
Previously, it had been found that a miner acquiring an ore block via auction would be hamstrung by the end-use regulations as often the grade of iron ore mined was found unsuitable for the end-use plant and neither could the miner dispose of the low grade ore sourced through commercial sale, as such sale from the captive mine was not permitted.
The easing of the auction rules to ensure higher participation has also been prompted by the fact that valuations of iron ore blocks have fallen in recent times, the government official added.
The government expected various the governments of various states in India to complete auctions of at least 34 mineral blocks within the current fiscal year. These included 17 limestone blocks, eight bauxite, four iron ore, two copper and two manganese blocks.