Team News Riveting
Bengaluru, December 3
The Ministry of Coal and the Ministry of Mines jointly held the Investors’ conclave on commercial coal mines auction and opportunities in mining sector on Saturday in Bengaluru.
Union Minister of Coal, Mines and Parliamentary Affairs Pralhad Joshi was the Chair, Chief Minister of Karnataka Basavaraj Somappa Bommai was the Chief Guest and Karnataka Minister of Mines and Geology Halappa Basappa Achar was the Guest of Honour for the event. The occasion was also graced by Amrit Lal Meena, Secretary , Coal, M Nagaraju, Additional Secretary and Nominated Authority, Ministry of Coal Sanjay Lohiya, Additional Secretary, Ministry of Mines Pankaj Kumar Pandey, Secretary, Commerce and Industries, Government of Karnataka and Senior Officers of Ministry of Mines.
Representatives of many companies, potential investors and members industry associations attended the conclave.
Ministry of Coal has till date concluded five tranches of commercial coal mines auction wherein Ministry has successfully allocated 64 coal mines. Ministry has launched the sixth tranche of commercial coal mine auction on November 03, 2022, wherein 141 coal mines are put on for offer including 8 coal mines under 2nd attempt of 5th tranche. This is the largest ever coal block auction till date launched in the country.
Additional Secretary and Nominated Authority M Nagaraju welcomed all the investors and informed the forum about the coal reforms undertaken by Ministry of Coal to improve the attractiveness of the coal auction process and make it more investor friendly. Sanjay Lohiya, Additional Secretary, Ministry of Mines highlighted that after the reforms brought in minerals sector in March 2021, the pace of exploration has increased.
Since reforms brought in March 2021, 108 mineral blocks have been auctioned as compared to 108 blocks auctioned in 6 years from 2015 to 2021. Further, auction of 70 blocks is under process in the country. Further, GSI has handed over more than 200 explored blocks to State Governments for auction. As such, more than 400 blocks are ready for auction in the country.
Union Minister of Coal, Mines and Parliamentary Affairs Pralhad Joshi emphasised on the importance of coal in securing energy security for the future of the country. He also assured the investors that the future outlook of the coal is positive, and the ministry is undertaking various reforms for ease of doing business in the coal sector. He stated that the current contribution of the mining sector in the country’s GDP is 0.9 per cent and submitted that the Prime Minister has the vision to enhance this contribution to 2.5 per cent by 2030 indicating that there is a huge potential in the mining sector and the investors are invited to participate in this opportunity.
Union Minister Joshi also stated that the Government has made several reforms in mineral sector such as removing the distinction between captive and non-captive mines, transfer of clearances of the previous lessee to the successful bidder, etc. The Chief Minister of Karnataka pointed out the importance of sustainable mining for maintaining balanced eco system and better future of the country. He stated that as per the Indian belief, whole cosmos is made of 5 elements.
“We are also made of these 5 elements. Future of mankind is dependent on how best we utilise these elements. Mother Earth is one of the elements which also gives us rich mineral resources. We are required to achieve sustainable mining. We have to adopt best mining culture to bring productivity and sustainability,” he said. He emphasised that sustainable production of minerals will meet the various needs of many sectors and fulfil the vision of the Prime Minister.
The Chief Minister stressed that Karnataka has high quality iron ore and the State is guided by the Supreme Court and NGT guidelines in allocation and mining of iron ore mines. Karnataka is expected to be largest manufacturer of Steel in the Country and it will be fuelled by the high grade iron ore mines of the State. He added that the country needs to explore adoption of best technology in the sector. The State also has rich reserves of tungsten, nickel, cobalt and gold which are in huge demand.
Amrit Lal Meena, Secretary, Ministry of Coal in his address pointed out that the requirement of various sectors in the country depends heavily on power and for that coal needs to be commercially explored. He reiterated the commitment of Ministry of Coal in supporting the coal industry and informed that Ministry of Coal is there to extend any help required by the prospective bidders.
M Nagaraju, Additional Secretary and Nominated Authority, Ministry of Coal delivered a presentation on the various reforms taken up in the coal sector such as introduction of commercial coal mining, liberalisation of approvals and promotion of coal gasification as means of sustainable development.
Chiranjib Patra, GM, CMPDIL gave a presentation on the technical details of the coal blocks being offered in the largest ever auction process, also presented the investment opportunities in the MDO sector and Mr. Shubham Goel, Vice President, SBI Capital Markets delivered a presentation on the terms and conditions of the auction process and investors perspective on commercial coal mining in the country.
Key features of the auction process include reduction in upfront amount and bid security amount, permission to relinquish part of the coal mine in case of partially explored coal mines, introduction of National Coal Index and National Lignite Index, ease of participation with no entry barriers, full flexibility in coal utilisation, optimized payment structures, efficiency promotion through incentives for early production and use of clean coal technology.
The sale of tender document commenced on November 03, 2022. Details of the mines, auction terms, timelines etc. can be accessed on MSTC auction platform. The auction shall be held online through a transparent 2 stage process, on the basis of Percentage Revenue Share.
SBI Capital Markets Limited, the sole Transaction Advisor to Ministry of Coal for the commercial coal mine auctions, is assisting the Ministry of Coal in conduct of the auction.
Dr. Veena Kumari Dermal, Joint Secretary, Ministry of Mines gave a brief presentation on reforms in mineral sector which has brought in ease of doing business and transparency that helped in increase in mineral production and revenue generation to States. She has informed about the major mining reforms that has been brought in MMDR Amendment Act, 2015 that mandates grant of mineral concession through e-auction to improve transparency and setting up of DMF and contribution to NMET. She also informed about the major reforms brought through the MMDR Amendment Act, 2021, that, inter-alia, includes auction of mineral blocks without end use restrictions and allowed transfer of all ML & CL without any charges and transfer of valid clearances. Further, she has informed that so far, total 216 major mineral blocks including 168 MLs and 48 CL have been auctioned in 10 States, since introduction of auction regime in 2015. Currently, 68 NITs for different minerals are at different stages of auction in various states. She further added that more than 381 potential blocks have been identified to be auction in next few years.
Shri Pankaj Pandey, Secretary, Department of Mines & Geology, Govt. of Karnataka gave presentation on the ongoing mineral blocks auctions in Karnataka and steps taken by the State Government in simplifying the application and approval process for the investors. State Govt. has auctioned 34 mineral blocks (5 CL and 29 ML), second highest after Odisha which has auctioned 40 blocks. Out of 34 auctioned blocks, 11 have started production. Further, 25 potentials blocks have been identified that will be auctioned shortly.
