The Directorate of Mines and Geology (DMG) in Goa has announced a sudden postponement of a crucial e-auction for 10 iron ore dumps, which was scheduled to take place on Friday. The department stated that a new date for the auction will be announced soon.
Scrutiny of Reports Causes Delay
Director of Mines and Geology, Narayan Gad, explained the reason behind the last-minute decision. He confirmed that the auction was delayed because the detailed project reports submitted by the interested mining companies are still under careful examination by The Energy and Resources Institute (TERI). This step is crucial to ensure all protocols are met before the bidding process begins.
The state government had put a massive 22 million tonnes of low-grade iron ore up for sale through this e-auction. The initiative had garnered significant interest from the mining sector, with a total of 44 tender documents purchased by various companies eager to participate. From this single auction, the Goa government expected to generate a substantial upfront revenue of approximately Rs 150 crore.
Financial Mechanics and Past Hurdles
Explaining the financial model, Gad detailed that once a company successfully handles a dump, it will be required to pay royalty and a premium to the state government. The government has set a reserve price of 22% for the e-auction. For example, if the Indian Bureau of Mines price is Rs 100 per tonne, a company purchasing at the reserve price would pay Rs 22 per tonne to the government.
This is not the first time the auction process has faced interruptions. Last year, after completing the first day of e-auctioning for low-grade dumps, the DMG cancelled the remaining three phases slated for January 31 and February 3 and 4, 2025, citing a "technical issue." Subsequently, in July, the entire process was annulled as the government decided to alter the auction procedure.
Legal Framework and Revenue Potential
The current auction drive operates under a legal framework established by the Supreme Court, which permitted the Goa government to conduct dump mining activities based on an expert committee's report. Following this, the state notified the Policy for Regulating Iron Ore Dump Handling on September 14, 2023.
The Dump Handling Policy, 2023, was a landmark move designed to address the enormous environmental and spatial challenge of an estimated 700 million tonnes of low-grade iron ore lying inside and outside mining leases across Goa. The policy also paves the way for the export of up to 25 million tonnes per annum. The revenue potential is significant, as evidenced by the Rs 136 crore the state earned from the 31st e-auction of 7.5 lakh tonnes of iron ore at jetties and plots held on November 13 and 14 last year.
The postponement, while a temporary setback, underscores the government's intent to proceed with caution and due diligence in managing this valuable yet challenging resource, balancing economic gains with regulatory compliance.
