India’s Ministry of Mines will incorporate measures to prevent “squatting” on iron ore assets secured by companies through the auction route, while amending the Mineral Auction Rules 2015, a ministry official said on Wednesday, September 6.
The official said that it has been noticed by the government that companies, after securing iron ore blocks through competitive bidding, “inordinately delay operationalizing the mines” for various reasons.
Companies, including those which secure blocks for captive mining, “squat” on the assets for reasons ranging from financial stress after overbidding at the auction, adverse market conditions, or are content simply to have enhanced assets on their balance sheet without commencing operations, the official said.
Hence, in course of amending the Mineral Auction Rules, the Ministry of Mines will either stipulate a specific timeframe for putting mines into operation or minimum production guidelines or financial penalties, or a combination of all the three, the official added.