Auction of Mineral Blocks in Odisha

Transcription

1 Auction of Mineral Blocks in Odisha Responses to Queries on Tender Documents (Notice Inviting Tender dated February 23, 2018) Phase - IV Directorate of Mines Government of Odisha April 05, 2018 April 05, 2018 Page 1 of 11

2 1. Tender Document Clause 2.2: Specified End Use Plant shall mean a plant engaged in the production of iron and steel owned by the Bidder and located in India. Refer to clause 2.20 of the Tender Document, which states Specified End Use Plant shall mean a plant engaged in the production of iron and steel owned by the Bidder and located in India. (i) Whether a bidder having integrated steel plant will be eligible to participate in auction? (ii) Whether independent Sponge Iron Plants will be eligible to participate in auction? (iii) Whether specified end use plant owned by Bidder includes a specified end use plant owned by a subsidiary company of the bidder, in which the Bidder holds more than 51%? Suggested Text for Amendment, if any It is recommended to use the phrase, "Integrated Steel plant" instead of "iron and steel plant" as per Schedule II of the Mineral Auction Rules To have clarity on the issue 2. Tender Document Clause 3.5: [Pursuant to sub-rule (3) and sub-rule (4) of Rule 6 of the Auction Rules, the State Government reserves this Mineral Block for Specified End Use. The minerals extracted under the mining lease shall: i. be utilised solely for the Specified End Use; and ii. not be sold or transferred or otherwise disposed of, either As per sub-rule (4) of Rule 6 of the Mineral (Auction) Rules, 2015 and Mineral (Auction) Amendment Rules, 2017: Where the State Government reserves a mine or mines for any particular specified end use, the minerals extracted under the mining lease shall, - (i) be utilised solely for the specified end use; and (ii) not be sold or transferred or otherwise disposed of, either April 05, 2018 Page 2 of 11

3 directly or indirectly. Provided that quantity of mineral equivalent to twenty five per cent of total mineral excavated in the previous financial year, for which end use was specified can be sold in the current financial year. directly or indirectly. In case some quantity of the mineral extracted during previous financial year remains unutilised, even after disposal of 25% thereof in the current financial year, what will happen to such unutilised quantity of mineral of the previous financial year? Provided that quantity of mineral equivalent to twenty five per cent. of total mineral excavated in the previous financial year, for which end use was specified can be sold in the current financial year. Clarity on the issue is required so as to ensure minerals do not remain unutilized 3. Tender Document Clause 3.5 Whether independent Sponge Iron Plants and Pellet Plants selling Sponge Iron & Pellets will be eligible to participate in auction? 4. Tender Document Clause 5 We would like to request you to kindly let us know the eligibility criteria and the Particulars of Bank Guarantee for the respective Blocks. Refer to clause 2.20 of the Tender Document, which states Specified End Use Plant shall mean a plant engaged in the production of iron and steel owned by the Bidder and located in India. Eligibility criteria and bid security amount is not mentioned in Blank Tender Document. Eligibility criteria and bid security is mentioned in Block Specific Tender Document. April 05, 2018 Page 3 of 11

4 5. Tender Document Clause 5 (b) In case both the blocks are allotted to a single bidder, what should be the net worth requirement of the bidder? 6. Tender Document Clause 5 (b) Whether a Joint Venture company is allowed to participate in a bid? If yes, then can bid on the strength on its JV partners? 7. Tender Document Clause 6.3. The Bidders who have purchased the Tender Document shall be eligible to visit the Mineral Block. The site visit to the Mineral Block shall be conducted with prior notice to the State Government through the following address directormines1@orissaminerals.gov.in. The should clearly bear the following subject line: Site Visit for Purheibahal Block. Suggested Text for Amendment, if any It is suggested that State Govt. organize site visit on a particular date inviting all the bidders as was conducted by Jharkhand Govt. for their iron ore block recently. Site visit organized by State Govt. would be more effective and many of the queries can be answered on the spot As per the tender document. Bidders are required to meet the eligibility conditions including the net worth requirement, as stated in the block specific tender documents individually. The Mineral (Auction) Amendment Rules, 2017 stipulate that the Net worth shall be the sum of paid up share capital and the free Reserves as per the audited Balance Sheet of the financial year ended immediately preceding the date of issuance of notice inviting tender. As per tender document April 05, 2018 Page 4 of 11

5 8. Tender Document Clause 8.2. The mining lease shall be for minerals found in the area pursuant to exploration prior to the e-auction: Provided that where, subsequent to the e-auction, any new mineral is discovered, then the holder of mining lease shall follow the provisions of the Act and the rules made thereunder for inclusion of such new mineral in the Mining Lease Deed. It is clarified that: i.)where, subsequent to grant of a mining lease, one or more new major minerals are discovered, the percentage of value of mineral despatched as quoted by the Successful Bidder under sub-rule (3) of rule (8) of Auction Rules read with the terms hereof shall be applicable for the purpose of payment to the State Government in respect of each such mineral. Major Mineral: As per sub-rule (4) of Rule 6 of the Mineral (Auction) Rules, 2015 and Mineral (Auction) Amendment Rules, 2017: Where the State Government reserves a mine or mines for any particular specified end use, the minerals extracted under the mining lease shall, - (i) be utilised solely for the specified end use; and (ii) not be sold or transferred or otherwise disposed of, either directly or indirectly. Provided that quantity of mineral equivalent to twenty five per cent. of total mineral excavated in the previous financial year, for which end use was specified can be sold in the current financial year. ii.)where, subsequent to the grant of mining lease, presence of minor mineral is established or discovered, the percentage of value of mineral despatched as quoted by the successful bidder under sub-rule (3) of rule (8) of Auction Rules shall inter-alia be applicable for the purpose of payment to the State Government in respect of each such mineral. The value of mineral despatched in case of minor mineral(s) shall be calculated based on the sale price of the relevant minor mineral as published by the State Government. Further, the mining lease in respect of such minor mineral(s) will be executed separately by the State Government. Minor Mineral: Further, the minor minerals may be treated as per Odisha Minor Mineral Concession Rules, (a) In case new mineral (major or minor) is discovered later on, whether end use criteria would be applicable for newly discovered major or minor mineral? April 05, 2018 Page 5 of 11

6 Criteria of end use restriction shall not be applicable for newly discovered major or minor mineral. 9. Tender Document Clause 9.1 ii As per IBM published prices for the corresponding time period. Sale price of the mineral (grade-wise for Orissa) as published by Indian Bureau of Mines for such month of despatch. IBM provides grade wise average sales of iron ore for major iron ore producing states in India. Since now monthly payments by successful bidder would be linked with selling price, it is suggetsed that IBM may be requested to tabulate prices for every 1 % increase in Fe %, starting from lowest Fe % present in the mines being put up for auction. 10. Tender Document Clause 10.4 a) How much Stamp duty is to be paid during the execution of MDPA or ML b) Methodology for calculation of Stamp Duty and Registration Fee may please be shared. The stamp duty on the MDPA and Mining Lease shall be payable in accordance with the provisions of the Indian Stamp Act, 1899 as applicable to the state of Odisha. Will help in estimation of project economics April 05, 2018 Page 6 of 11

7 11. Tender Document Clause-11(Time Table) Mine Development Agreement (MDPA) to be executed between State Government & Successful Bidder upon obtaining all consents, approvals, permits, no-objections from Various agencies/departments required applicable laws for commencement of mining operations. T2 + 4 months Please clarify whether only 4 months will be given for execution of MDPA after being declared as successful bidder as is evident from the time table? Suggested Text for Amendment, if any It can be made T2 + 2 years 4 months The Mineral (Auction) Amendment Rules, 2017 stipulate that no Mining Lease Deed shall be executed on expiry of a period of three years from the date of the letter of intent, 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 two years for execution of the Mining Lease Deed if the reasons for delay were beyond the control of the preferred bidder. Four months time is very less considering the fact that successful bidder has to take requisite approvals & consents like EC, FC & land acquisition, water etc from the respective authorities which takes long time. 12. Tender Document New Clause - Penalty for delay As per tender document Suitable clause to be inserted to exempt successful bidders from any penalty for the delay in operationlising the mine, due April 05, 2018 Page 7 of 11

8 to delay beyond control of the successful bidder like delay in getting approvals, clearances etc Suitable clause to be inserted to exempt successful bidders from any penalty for the delay in operationlising the mine, due to delay beyond control of the successful bidder like delay in getting approvals, clearances etc. 13. Tender Document For any reason, like eco sensitive forest zone related to Forest Clearance & carrying capacity limitations related to Environment Clearance are not provided to us. Whether, the expenses incurred by us for availing the mining lease will be refund to us? 14. Tender Document Clause (MDPA) The Upfront Payment paid by the Successful Bidder shall be adjusted in full at the earliest against the amount payable in accordance with the per cent of Value of Mineral Despatched quoted as the Final Price Offer on commencement of production of mineral(s). No As per sub-rule (2) of rule 11 of the Mineral (Auction) Amendment Rules, 2017, the upfront payment shall be adjusted in full at the earliest against the amount to be paid under subrule (3) of rule 8 on commencement of production of mineral as specified in the tender document. The period of adjustment may also extend beyond first 5 years from commencement of production. 1) It is need to clarify that what percentage of Final Price Offer quoted, will be adjusted against Upfront Payment in each year to adjust in full at the earliest. 2) If the adjustment of Upfront Payment in full extends beyond 5 years, as per above percent decided by the State Govt., from the commencement of production of minerals, then what will happen? April 05, 2018 Page 8 of 11

9 15. MDPA As per tender document Schedule E - Minimum production Requirement Minimum production is linked to % of production approved as per mining plan. What will happen, if there is a cap on production imposed by State government. Suggested Text for Amendment, if any Minimum production requirement shall be % of lower of the EC or approved mining plan or any cap in production imposed by State Government There may be restriction on production capacity due to cap in production imposed by State Government. 16. MDPA New Clause - Minimum production Rate As per tender document Minimum production rate from the block shall be indicated. Suggested Text for Amendment, if any Minimum production rate from the block area shall be [ MTPA]. This will ensure optimal utilisation of resource avoiding resource blockage April 05, 2018 Page 9 of 11

10 17. General Role of State Govt. in enabling the Preferred bidder to execute the work and get the permissions/noc from the reportedly trouble prone area. The Government of Odisha shall endeavour to provide assistance on best effort basis. The area is reportedly infested with extremism activities. Some form of Assurance to the successful bidder to create an atmosphere for peaceful excercising of the legitimate rights. Opposition from the locals is being experienced while executing the work in adjoining block. Whether the concerned distirct level departments will provide support by involving higher level authorities 18. General Will the State Government acquire Land for the Lessee under the State LARR Act, 2015 within the stipulated time frame? Without Land acquisition and transfer of surface rights, Mining is not feasible. 19. General Whether acquisition of the ST Land is pre-requisite for grant of mining lease and its execution or can be done after the execution? Land acquisition will be the sole responsibility of the Preferred/Successful Bidder and the Government of Odisha may, in its sole discretion, provide assistance regarding acquisition of land as per law. The surface right have to be obtained before the commencement of the mining operation in the land concerned. However, the approval under the F.C Act have to be obtained prior to grant /execution of lease. April 05, 2018 Page 10 of 11

11 20. Land Schedule Detailed Land Schedule of the proposed ML Area Will the State Government acquire Land for the Lessee under the new Land Act within the stipulated time frame? Most of the lands are in the ST category Land acquisition will be the sole responsibility of the Preferred/Successful Bidder and the Government of Odisha may, in its sole discretion, provide assistance regarding acquisition of land as per law. April 05, 2018 Page 11 of 11