Ministry of Mines has issued a significant notification (G.S.R. 49(E)) dated January 21, 2024, introducing amendments to the Mineral (Auction) Rules, 2015. These changes, empowered by section 13 of the Mines and Minerals (Development and Regulation) Act, 1957, bring about crucial modifications in bid submissions, upfront payments, and performance security.

Mineral (Auction) Amendment Rules, 2024, introduced by the Ministry of Mines, mark a significant shift in the regulatory landscape governing mineral auctions. These changes, ranging from bid submission rules to upfront payments and performance security, aim to enhance transparency and fairness in the auction process. Noteworthy limits have been imposed on upfront payments and performance security for preferred bidders and composite license holders, ensuring a balanced and competitive environment. Stakeholders in the mining sector are urged to familiarize themselves with these amendments to ensure compliance and successful participation in future mineral auctions.

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MINISTRY OF MINES

NOTIFICATION

New Delhi the 21st January, 2024

G.S.R. 49(E).In exercise of the powers conferred by section 13 of the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957), the Central Government hereby makes the following rules further to amend the Mineral (Auction) Rules, 2015, namely:—

1. Short title and commencement.(1) These rules may be called the Mineral (Auction) Amendment Rules, 2024. (2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Mineral (Auction) Rules, 2015 (hereinafter referred to as the said rules), in rule 2, in sub-rule (1),—

(a) after clause (a), the following clause shall be inserted, namely:—

‘(aa) “auction premium” means the amount payable by the lessee under sub-rule (2) of rule 13;’;

(b) in clause (d), for the words, brackets, letters and figures “sub-clause (iii) of clause (b) of sub-rule (4) of rule 9”, the words, brackets, figures and letter “clause (iii) of sub-rule (9) of rule 9 or clause (iii) of sub-rule (10) of rule 19E” shall be substituted;

(c) in clause (e), for the words, brackets and figures “sub-clause (iv) of clause (a) of sub-rule (4) of rule 9”, the words, brackets, figures and letter “sub-rule (8) of rule 9 or sub-rule (9) of rule 19E” shall be substituted;

(d) in clause (i), after the words and figure “of rule 18”, the words, brackets, figures and letter “sub-rule (3) of rule 19G” shall be inserted;

(e) in clause (j), for the words, brackets and figures “sub-clause (ii) of clause (a) of sub-rule (4) of rule 9”, the words, brackets, figures and letter “sub-rule (6) of rule 9 or sub-rule (7) of rule 19E” shall be substituted.

3. In the said rules, in rule 4, after sub-rule (2), the following sub-rule shall be inserted, namely:—

“(3) Exploration licence under section 10BA in an area in respect of any mineral specified in the Seventh Schedule of the Act shall be granted in the manner specified under Chapter III A.”.

4. In the said rules, in rule 6, after sub-rule (5), the following sub-rules shall be inserted, namely:—

‘(6) A bidder shall submit only one bid in an auction of a mineral block and no affiliate of a bidder shall submit a bid in the same auction where such bidder has submitted bid.

(7) In case a bidder submits more than one bid in an auction of a mineral block or an affiliate of a bidder submits bid in same auction where such bidder has submitted bid, the bids submitted by the bidder and its affiliate shall be rejected.

Explanation.— For the purposes of this rule,—

(i) “Affiliate” with respect to a bidder shall mean a person who, (a) controls such bidder, (b) is controlled by such bidder, (c) is under common control with such bidder, (d) is an associate company of the bidder, or (e) is a subsidiary company of such bidder;

(ii) the expressions “associate company”, “control” and “subsidiary company” shall have the same meanings as assigned to them in the Companies Act, 2013 (18 of 2013).’.

5. In the said rules, in rule 9, in sub-rule (12), in the second proviso, after the word “three”, the words “, and even in case of a single technically qualified bidder” shall be inserted.

6. In the said rules, in rule 11, in sub-rule (1), the following proviso shall be inserted, namely:—

“Provided that for the preferred bidder selected pursuant the notice inviting tender issued after the date of commencement of the Mineral (Auction) Amendment Rules, 2024, the amount of upfront payment shall not exceed five hundred crore rupees.”

7. In the said rules, in rule 12, in sub-rule (1), the following proviso shall be inserted, namely:—

“Provided that for the preferred bidder selected pursuant the notice inviting tender issued after the date of commencement of the Mineral (Auction) Amendment Rules, 2024, the amount of performance security shall not exceed five hundred crore rupees.”

8. In the said rules, in rule 19,—

(i) in sub-rule (1), after the proviso, the following proviso shall be inserted, namely:—

“Provided further that for the preferred bidder selected pursuant the notice inviting tender issued after the date of commencement of the Mineral (Auction) Amendment Rules, 2024, the amount of performance security shall not exceed two hundred and fifty crore rupees.”

(ii) in sub-rule (3), the following proviso shall be inserted, namely:—

“Provided that for the holder of composite licence selected pursuant the notice inviting tender issued after the date of commencement of the Mineral (Auction) Amendment Rules, 2024, the amount of

performance security specified in sub-rules (2) and (3) shall not exceed five hundred crore rupees.”

  1. In the said rules, after rule 19, the following shall be inserted, namely:—

“CHAPTER III A

GRANT OF EXPLORATION LICENSE

19A. Prerequisites for auction of exploration licence.— (1) The State Government may initiate auction process for grant of exploration licence with respect to an area within the State, in respect of the minerals specified in Seventh Schedule of the Act, in accordance with the provisions of the Act and this Chapter.

(2) Any person intending to obtain exploration licence in respect of an area may submit a proposal to the State Government in the format specified in Schedule V along with available geoscience data for notification of the area for auction to grant an exploration licence.

(3) In order to identify a block for auction for grant of exploration licence, including in any area proposed by any person under the sub-rule (2), the State Government shall constitute a committee consisting of the following members, namely:—

(a) Principal Secretary or Secretary in the Mining and Geology Department of State Government (by whatever name called) – Chairman;

(b) Deputy Director General, State Unit of Geological Survey of India – Member;

(c) Regional Controller of Mines of Indian Bureau of Mines – Member;

(d) Regional Director of Atomic Minerals Directorate for Exploration and Research – Member;

(e) Director in the Mining and Geology Department of State Government (by whatever name called) – Member Secretary.

(4) The committee shall identify and recommend to the State Government the blocks for auction for grant of exploration licence out of—

(i) the area identified by the Geological Survey of India or the Directorates of Mining and Geology of State Government (by whatever name called) or any other agency of the Central Government or State Government;

(ii) the area proposed by any person under sub-rule (2); or

(iii) any other area,

on the basis of geological information available in the National Geoscience Data Repository (NGDR) or in similar platforms or on the basis of the available geological reports or the like.

(5) The committee shall reject or recommend the proposal received under sub-rule (2) within a period of sixty days of its receipt in the State Government with such modification as it deem fit.

(6) The committee while identifying and recommending the block shall exclude from the block the areas covered under the following, namely:—

(i) a subsisting mineral cion issued under section 17 or notification for reservation issued under section 17A:

Provided that if the committee is of opinion that it is expedient in the interest of conservation of mineral resources or for the scientific and sustainable development and exploitation of minerals specified in the Seventh Schedule of the Act, it may include the area covered under clause (iv) in the block recommended for grant of exploration licence.

(7) The State Government may reject or accept the recommendation of the committee with such modification as it deem fit and send the details of identified block for previous approval of the Central Government for auction under sub-section (4) of section 10BA, within sixty days of its receipt.

(8) The Central Government shall grant or reject the previous approval within sixty days of its receipt and thereafter the State Government shall notify the identified block for conducting auction for grant of exploration licence within sixty days of receipt of the previous approval.

(9) The State Government shall, prior to issuance of the notice inviting tender with respect to auction, identify and demarcate the area where an exploration licence is proposed to be granted through auction, specifying its boundary latitude and longitude coordinates.

19B. Eligibility for exploration licence.(1) For the purpose of participating in the auction of exploration licence, an applicant shall meet the requirements as specified in section 5 and the terms and conditions of eligibility as specified in Schedule I.

(2) The eligibility for participating in the auction shall be determined as per the terms and conditions of eligibility for participating in the auction and the Successful Bidder shall be decided solely on the basis of financial bids submitted by the eligible bidders.

(3) A bidder shall submit only one bid in an auction of a mineral block and no affiliate of a bidder shall submit a bid in the same auction where such bidder has submitted bid.

(4) In case a bidder submits more than one bid in an auction of a mineral block or an affiliate of a bidder submits bid in same auction where such bidder has submitted bid, the bids submitted by the bidder and its affiliate shall be rejected.

Explanation.For the purposes of this rule,—

(i) “Affiliate” with respect to a bidder shall mean a person who, (a) controls such bidder, (b) is controlled by such bidder, (c) is under common control with such bidder, (d) is an associate company of the bidder, or (e) is a subsidiary company of such bidder;

(ii) the expressions “associate company”, “control” and “subsidiary company” shall have the same meanings as assigned to them in the Companies Act, 2013 (18 of 2013).

19C. Electronic auction for exploration licence.— (1) An auction shall be conducted only through an online electronic auction platform.

(2) The State Government may utilise any online electronic auction platform which meets the minimum technical and security requirements as specified in the Guidelines for compliance to Quality requirements of e-Procurement Systems issued by the Standardisation Testing and Quality Certification Directorate, Department of Information Technology, Ministry of Communications and Information Technology, Government of India.

19D. Bidding parameters for exploration licence.(1) The State Government shall specify in the tender
document the maximum percentage share (known as “ceiling price”) of the auction premium that shall be payable by the future lessee of mining lease which shall be auctioned pursuant to the prospecting operations undertaken under the exploration licence being auctioned:

Provided that the ceiling price shall not be less than twenty-five per cent.

(2) The bidders shall quote, for the purpose of receiving payment from the State Government, a percentage share of the auction premium payable by such future lessee equal to or below the ceiling price and the bidder quoting the minimum percentage in accordance with the bidding process specified in rule 19E shall be the preferred bidder.

19E. Bidding process for exploration licence.(1) Subject to the provisions of rule 19A, the State Government shall issue a notice inviting tender, including on their website, to commence the auction process and such notice shall contain brief particulars regarding the area under auction, including,—

(a) particulars of the area identified and demarcated, specifying its boundary latitude and longitude coordinates; and

(b) available geoscience data.

(2) The tender document issued by the State Government shall contain,—

(a) particulars of the area identified and demarcated, specifying its boundary latitude and longitude coordinates; and

(b) information on available geosciences data.

(3) The bidders shall be provided a fixed period, as notified by the State Government, to study the tender document and such reports and the bidding process shall commence only on expiry of such period.

(4) The auction shall be a descending reverse online electronic auction and shall comprise of attempts of auction with each attempt of auction consisting of a first round of auction and a second round of auction.

(5) In the first round of auction, the bidders shall submit,–

(A) a technical bid comprising amongst others, documentary evidence to confirm eligibility as per the provisions of the Act and the rules made thereunder to participate in the auction, bid security and such other documents and payments as may be specified in the tender document; and

(B) an initial price offer which shall be a percentage share of the auction premium that shall be payable by the future lessee whose mining lease shall be auctioned pursuant to the prospecting operations undertaken under the exploration licence being auctioned.

(6) The bid security shall be submitted in the form of a bank guarantee or through security deposit and shall be for an amount equivalent to,—

(a) fifty lakh rupees for area less than or equal to five hundred square kilometers; and

(b) one crore rupee for area more than five hundred square kilometers but less than or equal to one thousand square kilometers.

(7) Only those bidders who are found to be eligible in accordance with the terms and conditions of eligibility specified in rule 19B and whose initial price offer is equal to or less than the ceiling price, referred to as “technically qualified bidders”, shall be considered for the second round of auction.

(8) The lowest initial price offer amongst the technically qualified bidders shall be the limiting price for the second round of online electronic auction.

(9) The technically qualified bidders shall be ranked on the basis of the ascending initial price offer submitted by them and the technically qualified bidders holding the first fifty per cent. of the ranks (with any fraction rounded off to higher integer) or the top five technically qualified bidders, whichever is higher, shall qualify as qualified bidders for participating in the second round of electronic auction:

Provided that if the number of technically qualified bidders is between three and five, then all the technically qualified bidders shall be considered as qualified bidders:

Provided further that in the event of identical initial price offers being submitted by two or more technically qualified bidders, all such technically qualified bidders shall be assigned the same rank for the purposes of determination of qualified bidders and in such case, the aforementioned fifty per cent. shall stand enhanced to the extent of tie occurring within the first fifty per cent.

Illustrations

1. In the event there are a total of ten technically qualified bidders, and each technically qualified bidder submits different initial price offer, then the technically qualified bidders holding the first fifty per cent. of ranks shall be considered to be qualified bidders.

2. If three such technically qualified bidders submit the same initial price offer and are ranked in first fifty per cent. of the total number of ranks, then, all the three technically qualified bidders shall be considered to be qualified bidders and the total number of qualified bidders shall stand increased by two.

(10) Where the total number of technically qualified bidders is three or more, the auction process shall proceed to the second round of auction which shall be held in the following manner, namely:—

(iv) the qualified bidders may submit their final price offer which shall be a percentage share of the auction premium that shall be payable by the future lessee whose mining lease shall be auctioned pursuant to the prospecting operations undertaken under the exploration licence being auctioned and lower than the limiting price for the second round:

Provided that the final price offer may be revised by the qualified bidders till the conclusion of the auction as per the technical specifications of the auction platform;

(v) The auction process shall be annulled if none of the qualified bidders submits a final price offer on the online electronic auction platform;

(vi) The qualified bidder who submits the lowest final price offer shall be declared as the “preferred bidder” immediately on conclusion of the auction.

(11) Where the total number of technically qualified bidders is less than three, then no technically qualified bidder shall be considered to be qualified bidder and the first attempt of auction shall be annulled.

(12) On annulment of the first attempt of auction, the State Government may decide to–

(a) commence the auction process de novo with a separate set of terms and conditions and ceiling price as it may deem fit and necessary; or

(b) conduct the second attempt of auction.

(13) In case the State Government decides to conduct the second attempt of auction as specified under sub-rule (12), the terms and conditions of the second attempt of auction shall remain the same as in the first annulled attempt of auction:

Provided that the lowest initial price offer of the technically qualified bidders if any in the first annulled attempt shall be the ceiling price in first round of the second attempt:

Provided further that the bidding shall continue to the second round even in case the number of technically qualified bidders is less than three, and even in case of a single technically qualified bidder.

19F. Conduct of auction of exploration licence by Central Government.— (1) The State Government shall intimate to the Central Government regarding the following, namely:—

(a) identification and recommendation of any area for auction of exploration licence by the committee under rule 19A within a period of fifteen days of receiving it;

(b) decision of the State Government on the recommendation of the committee under rule 19A within a period of fifteen days of such decision;

(c) publication of notice under sub-section (4) of section 10BA along with its copy, within fifteen days of publication of such notice;

(d) issue of notice inviting tender for auction for mining lease under rule 19E along with its copy, within fifteen days of issue of such notice;

(e) outcome of any auction for exploration licence, within fifteen days of completion of auction; and

(f) termination, lapse or surrender of exploration licence or terminating or lapse of letter of intent for exploration licence, within fifteen days from such termination, lapse or surrender.

(2) In case the Central Government decides to notify an area for auction or conduct auction for exploration licence under sub-section (5) or sub-section (7) of section 10BA, as the case may be, the provisions of these rules regarding auction in respect of exploration licence, as applicable to a State Government, shall mutatis mutandis be also applicable to the Central Government.

(3) Upon successful completion of the auction, the Central Government shall intimate the details of the preferred bidder in the auction to the State Government and the State Government shall grant exploration licence for such area to such preferred bidder in accordance with rule 19G.

19G. Grant of exploration licence.— (1) The preferred bidder shall submit a performance security in the manner specified in sub-rule (1) of rule 19H within fifteen days after being declared as preferred bidder, and upon receipt of such performance security, the State Government shall issue a letter of intent to the preferred bidder within fifteen days of receipt of performance security:

Provided that the State Government may, for the reasons to be recorded in writing, extend the period of fifteen days for submission of performance security by further fifteen days.

(2) In case the preferred bidder fails to submit the performance security within the period or extended period specified in sub-rule (1), the State Government shall,—

(a) forfeit the bid security of the preferred bidder; and

(b) offer the bidder who had submitted second-lowest price offer in the second round of auction to meet the lowest final price offer and if the said bidder agree to the said offer in writing and submit the performance security within fifteen days of receipt of offer, the State Government shall declare the said bidder as the preferred bidder and issue letter of intent to him:

Provided that the State Government may, for the reasons to be recorded in writing, extend the period of fifteen days by further fifteen days.

(3) On receipt of the letter of intent the preferred bidder shall be considered to be the successful bidder upon fulfilment of the following conditions, namely:—

(a) compliance with all the terms and conditions of eligibility;

(b) obtaining all consents, approvals, permits, no-objections and the like as may be required under applicable laws for commencement of reconnaissance or prospecting operations or both; and

(c) submitting the scheme of reconnaissance or prospecting or both in accordance with the Mineral Conservation and Development Rules, 2017.

(4) Upon fulfilment of the conditions specified in sub-rule (3), the State Government shall grant an exploration licence to the successful bidder and such exploration licence shall be subject to the provisions of the Act and the rules made thereunder.

Provided that on expiry of a period of one year from the date of the letter of intent, no exploration licence deed shall be executed and the letter of intent shall be invalidated leading to annulment of the entire process of auction:

Provided further that the State Government may allow a further period of six months for execution of the exploration licence deed, if the reasons for delay were beyond the control of the preferred bidder.

(5) The exploration licencee shall conduct geological exploration (reconnaissance or prospecting operations or both) of the area under the exploration licence so as to ascertain evidence of mineral contents and shall submit periodic reports in accordance with the Act and rules made thereunder, and all reports, studies and other documentation related to the geological exploration of the area under the exploration licence shall be submitted to the State Government with its copy to the Indian Bureau of Mines.

(6) Period of exploration licence shall be in accordance with sub-section (10) of section 10BA.

(7) The exploration licencee may, at any time, surrender a part or the entire area to the State Government, subject to the conditions specified in rule 9B of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016:

Provided that after three years from the date of execution of the exploration licence, the exploration licencee may retain an area not exceeding twenty-five per cent. of the total area covered under that licence for the purpose of continuing reconnaissance or prospecting operations and shall surrender the remaining area after submitting a report to the State Government stating the reasons for retention of the area proposed to be retained by him and the boundaries of that area.

(8) If an exploration licencee,—

(a) fails to complete reconnaissance and prospecting operations within the period permitted under sub-section (10) of section 10BA; or fails to establish the existence of mineral contents as specified in rule 5 of the Minerals (Evidence of Mineral Contents) Rules, 2015 for grant of mining lease and submit the geological report within the period specified under sub-section (12) of section 10BA, such licencee shall not be eligible to receive any share out of the auction premium of the mining lease granted in the area covered by his exploration licence and the State Government may take any action as it deems fit, including imposition of penalty in form of appropriation of performance security;

(b) completes reconnaissance and prospecting operations within the period permitted under sub-section (10) of section 10BA and submits to the State Government and the Indian Bureau of Mines the result of the prospecting operations in the form of a geological report prepared in accordance with rule 5 of the Mineral (Evidence of Mineral Contents) Rules, 2015; identifying the area suitable for grant of a mining lease within the period specified under sub-section (12) of section 10BA, then such licencee shall be entitled to receive the percentage share in auction premium of the mining lease in accordance with these rules.

(9) Exploration licencee shall prepare separate geological report for each block identified for grant mining lease under sub-rule (8).

19H. Performance Security for exploration licence.— (1) The amount of performance security shall be as follows, namely:—

(a) one crore rupees for area less than or equal to five hundred square kilometers; and

(b) two crore rupee for area more than five hundred square kilometers but less than or equal to one thousand square kilometers.

(2) The performance security shall be provided through bank guarantee in the format as specified in Schedule IV or through security deposit, which may be appropriated in the following events, namely:—

(a) non-adherence to scheme of reconnaissance or prospecting, as the case may be;

(b) disclosure of exploration data to an unauthorized entity;

(c) non-disclosure of entire exploration data, reports or any other information related to exploration to State Government or any other Government organisation authorised to receive such information under the law;

(d) serious discrepancy in exploration data, reports or any other information related to exploration to State Government or any other Government organisation authorised to receive such information under the law; or

(e) contravention of the provision of these rules and the exploration licence deed.

(3) The percentage of performance security to be appropriated in the events specified in sub-rule (2) shall be specified in the tender document or decided by the State Government as it deem fit.

(4) In case of appropriation of performance security, the exploration licencee shall replenish or top-up the performance security within thirty days of such appropriation to keep the amount of performance security maintained at the amount specified under sub-rule (1).

(5) The State Government on being satisfied that the holder of exploration licence has completed prospecting operations but is unable to establish the existence of mineral contents even after making all possible efforts in accordance with the Minerals (Evidence of Mineral Contents) Rules, 2015, shall return performance security.

19I. Payment to the holder of exploration licence.(1) The State Government shall pay by electronic transfer to the exploration licencee the percentage share quoted by him in the auction of exploration licence out of the auction premium deposited in a month by the future lessee who has obtained mining lease in auction pursuant to the prospecting operations undertaken by the exploration licencee, within thirty days of deposit of auction premium.

(2) The share of the exploration licencee shall be payable for entire period of fifty years of the mining lease or till exhaustion of resources, whichever is earlier.

(3) In case of termination, lapse or surrender of mining lease, share of the exploration licencee shall be payable out of the auction premium deposited by the subsequent lessee of the area for the remaining period out of fifty years from the date of commencement of the first lease for the area or till exhaustion of resources, whichever is earlier.

(4) The percentage share quoted by the exploration licencee shall be applicable for each mineral specified in the Seventh Schedule to the Act whose existence of mineral content has been established by him in accordance with the exploration norms required for grant of mining lease under Mineral (Evidence of Mineral Contents) Rules, 2015.

(5) The share of the exploration licencee shall be payable out of auction premium of all the mining leases of the minerals specified in the Seventh Schedule to the Act, auctioned pursuant to the prospecting operations undertaken by the exploration licencee.

(6) Exploration licencee shall not be entitled to receive share in respect of mineral not specified in the Seventh Schedule of the Act or whose existence of mineral content has not been established by him in accordance with the exploration norms required for grant of mining lease under Mineral (Evidence of Mineral Contents) Rules, 2015.

(7) Notwithstanding anything contained in this rule, the exploration licencee and lessee may enter into agreement regarding payment of the share to exploration licencee, such as lump-sum payment in lieu of percentage share in auction premium; and upon such agreement,—

(a) the exploration licencee and lessee shall submit a copy of such agreement to State Government; and

(b) subsequent to coming into effect of the agreement, the auction premium payable by lessee to the State Government shall reduce by the percentage share of exploration licencee and the State Government shall not be liable pay any amount to exploration licencee.

(8) After completion of prospecting operations and submission of geological report to the State Government in accordance with the rules, the exploration licencee may transfer his right to receive percentage share to any other entity, with the previous approval of the State Government and the State Government shall accept or reject previous approval within ninety days of receipt of such application.

(9) In case an exploration licencee becomes lessee of a mining lease auctioned pursuant to the prospecting operations undertaken by him, then such lessee shall deposit auction premium to the State Government after deducting the percentage share that would have been payable to the exploration licencee.

(10) The State Government shall pay by electronic transfer to the exploration licencee a share in each installment of the upfront payment payable by the lessee under rule 11 in the following manner, namely:—

(i) the share in each installment shall be equal to the percentage quoted by exploration licencee in the auction of exploration licence multiplied by the amount of installment of the upfront payment;

(ii) the share in each installment shall be paid to exploration licencee by the State Government within thirty days of deposit of the installment by the lessee; and

(iii) the payments to exploration licencee under this sub-rule shall be adjusted in full at the earliest against the share in auction premium payable to the exploration licencee under this rule.

19J. Auction for mining lease pursuant to exploration licence.

(1) The manner and terms and conditions for auction of a mining lease specified in Chapter II of these rules shall be applicable for auction of mining lease of a block identified pursuant to the prospecting operations undertaken under an exploration licence, subject to the conditions specified in this rule.

(2) The State Government shall initiate the auction process for grant of mining lease under section 10B read with section 11 within six months from the date of receipt of the geological report from the exploration licencee in respect of the area where existence of mineral content is established as specified in rule 5 of the Mineral (Evidence of Mineral Contents) Rules, 2015 and shall select the preferred bidder for grant of such mining leases within one year from the date of receipt of the geological report:

Provided that in respect of any mineral specified in the Part D of the First Schedule to the Act, the auction process for grant of mining lease shall be conducted by the Central Government under section 11D and rule 9B.

(3) In case the preferred bidder is not selected within the period so specified in sub-rule (2), the State Government shall pay to the exploration licencee an amount equivalent to one per cent. of the expenditure incurred towards reconnaissance or prospecting operations or ten lakh rupees per month, whichever is higher, till selection of the preferred bidder for the mining lease or till annulment of second attempt of auction due to insufficient number of bidders and such payment made to exploration licencee will be adjusted with the amount payable to him out of auction premium to be deposited by the holder of mining lease.

Explanation.— For purposes of this sub-rule, the amount payable shall be determined on the basis of account submitted by the exploration licencee of the expenditure incurred towards reconnaissance or prospecting operations duly certified by a chartered accountant.

(4) In case of termination, lapse or surrender of mining lease or termination or lapse of letter of intent for mining lease granted pursuant to exploration licence, the State Government shall give an opportunity to the exploration licencee to obtain mining lease in such area at the same auction premium discovered in the auction of the mining lease.

(5) In case of refusal of the exploration licencee to obtain mining lease under sub-rule (5), the State Government or the Central Government, as the case may be, shall initiate auction process and select preferred bidder for such area within the period specified in sub-rule (2) and in case the preferred bidder is not selected within the said period, the State Government or the Central Government, as the case may be, shall pay to the exploration licence holder in accordance with sub-rule (3).

(6) The exploration licencee shall not be prohibited from participating in the auction for the mining lease auctioned pursuant to the prospecting operations undertaken by him subject to fulfillment of the eligibility conditions under rule 6.

(7) The tender document for auction of mining lease shall, in addition to the details specified in sub-rule (2) of rule 9, shall contain the following, namely:—

(a) raw data and bore-hole cores generated by such agency during prospecting operations and periodic report submitted by such agency in respect of the block shall be made available for inspection to bidders in the auction;

(b) the ownership structure or shareholding details of the exploration licencee.

(8) A bidder participating in auction for mining lease shall declare to the State Government or the Central Government, as the case may be, if he is related party of the exploration licencee pursuant to whose prospecting operations the mining lease is being auctioned.

(9) The State Government or the Central Government, as the case may be, shall intimate other bidders in auction regarding participation of exploration licencee or his related party in the auction.

(10) In case the exploration licencee or his related party participate as bidder in the auction of mining lease being auctioned pursuant to his prospecting operations, then, in the second round of online electronic auction, name of licencee or his related party and his final price offer (including revised final price offers during bidding) shall remain visible to all the qualified bidders.”.

10. In the said rules, after rule 23, the following rule shall be inserted, namely:—

“24. Participation in auction for mining lease or composite licence by an agency covered under proviso to sub­section of (1) of section 4.— (1) The manner and terms and conditions for auction of a mining lease or composite licence specified in Chapter II and Chapter III, respectively of these rules shall be applicable for auction of a block identified pursuant to the prospecting operations undertaken by an agency covered under proviso to sub-section of (1) of section 4, subject to the conditions specified in this rule.

(2) An agency covered under proviso to sub-section of (1) of section 4 who has undertaken exploration of a mineral specified in the Part D of the First Schedule of the Act or the Seventh Schedule of the Act shall not be prohibited from participating in the auction for the mining lease or composite licence auctioned pursuant to the prospecting operations undertaken by such agency for such mineral subject to fulfillment of the eligibility conditions under rule 6.

(3) The tender document for auction of mining lease or composite licence shall, in addition to the details specified in sub-rule (2) of rule 9, shall contain the following, namely:—

(a) raw data and bore-hole cores generated by such agency during prospecting operations and periodic report submitted by such agency in respect of the block shall be made available for inspection to bidders in the auction;

(b) the ownership structure or shareholding details of such agency.

(4) A bidder participating in auction for mining lease or composite licence shall declare to the State Government or the Central Government, as the case may be, if he has explored the block pursuant to whose prospecting operations the mining lease ore composite licence is being auctioned or is related party of such agency.

(5) The State Government or the Central Government, as the case may be, shall intimate other bidders in auction regarding participation of such agency or his related party in the auction.

(6) In case such agency or his related party participate as bidder in the auction of mining lease being auctioned pursuant to his prospecting operations, then, in the second round of online electronic auction, name of such agency or his related party and his final price offer (including revised final price offers during bidding) shall remain visible to all the qualified bidders.”.

11. In the said rules, in Schedule I, after para 2 and before the Explanation, the following para shall be inserted, namely:—

“3. In the auction of exploration licence, the applicant shall have a net worth of more than or equal to twenty-five crore rupee.”.

12. In the said rules, in Schedule IV, for the words, brackets and figures, “FORMAT FOR PERFORMANCE SECURITY FOR COMPOSITE LICENCE [see rule 19(4)]”, the following shall be substituted, namely:—

“FORMAT FOR PERFORMANCE SECURITY FOR COMPOSITE LICENCE AND EXPLORATION LICENCE

[see rule 19(4) and rule 19H(2)]”.

13. In the said rules, after Schedule IV, the following Schedule shall be inserted, namely:—

“SCHEDULE V
[see rule 19A(2)]

FORMAT FOR SUBMITTING PROPOSAL FOR AUCTION OF AN AREA FOR GRANT OF EXPLORATION LICENCE

To,
The Director,
Mining and Geology Department,
Government of ___ [mention name of State Government]

Madam/ Sir,

Under the provision of sub-rule (2) of rule 19A of the Mineral (Auction) Rules, 2015, I/we am/are submitting the following details and other particulars of the area for consideration of the State Government to auction exploration licence in respect of the area. It is submitted that I/we intend to participate in auction of exploration licence in respect of the said area.

1. Name and Address of the Applicant

(a) Name:
(b) Postal address:
(c) Telephone Number (Office):
(d) Fax number (Office):
(e) Mobile No.:
(f) Telephone Number (Residence):
(g) E-Mail address:

2. Location Details of the Area Proposed for Auction

(a) State
(b) District (s)
(c) Nearby Village(s)
(d) Survey of India (SOI) Toposheet (s) No.
(e) Area in sq. km
(f) Boundary coordinates of the proposed block (in Decimal degree)

3. Mineral Potential of the Area

(a) Name of Mineral(s) identified/ expected in the area/ block
(b) Basis on which mineral potential in the area has been identified
(c) List of documents and references relied upon in support of item (b) above.

4. Documents to be enclosed with the application

(i) Location of the proposed block demarcated on Survey of India (SOI) Toposheet No.

(ii) Documents mentioned in item 3(c) above.

Place:
Date:

Signature of Applicant”.

[F. No. M.VI-1/3/2023-Mines VI]
Dr. VEENA KUMARI DERMAL, Jt. Secy.

Note:The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 406(E), dated the 20th May, 2015 and lastly amended, vide number G.S.R. 648(E), dated the 1st September, 2023.

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