Ch­hat­tis­garh leads the way

CH­HAT­TIS­GARH MAKES HIS­TORY: AUC­TIONS FIRST GOLD MINE IN THE COUN­TRY

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CH­HAT­TIS­GARH CRE­ATES HIS­TORY

Ch­hat­tis­garh cre­ated his­tory when it auc­tioned its Bagh­mara Gold Mine at Son­akhan in Balod­abazaar-bhat­a­para district on Fe­bru­ary 26, 2016. It is the first gold mine auc­tioned in the coun­try for grant of com­pos­ite li­cence (prospect­ing li­cence-cum­min­ing lease) since en­force­ment of new amend­ment in Mines and Min­er­als (De­vel­op­ment and Reg­u­la­tion) Act 2015.

Mineral Re­sources De­part­ment, Govt. of Ch­hat­tis­garh, had iden­ti­fied 4 lime­stone blocks for the pur­pose of grant­ing a Min­ing Lease (ML) for spec­i­fied end use of clinker/ce­ment, and 1 gold block for the pur­pose of grant of Com­pos­ite Li­cence (CL), through for­ward elec­tronic auc­tion in the plat­form pro­vided by MSTC. Ch­hat­tis­garh gov­ern­ment no­ti­fied auc­tion of th­ese mines on De­cem­ber 8, 2015. The pre-bid con­fer­ence for reg­is­tered bid­ders for the gold block was con­ducted on Jan­uary.

Sev­eral states came for­ward for auc­tion of their lime­stone mines. Ch­hat­tis­garh, how­ever, earned the dis­tinc­tion of be­com­ing the first state in In­dia, amongst a host of other states like Ma­ha­rash­tra, Gu­jarat, Ra­jasthan, et al, to suc­cess­fully auc­tion a ML for non-coal mineral blocks fol­lowed by a CL, for the first gold mine in In­dia.

Over 160 bids were sub­mit­ted and the mine wit­nessed ag­gres­sive bid­ding that lasted for 13 hours - when the fi­nal bid was stamped. Lon­don-listed Vedanta Re­sources Inc bagged the auc­tion with the high­est bid of 12.55% of In­dian Bu­reau of Min­ing (IBM) price of Rs.74,712/troy ounce (1 troy ounce = 31.10 gram). The com­pany would be granted the com­pos­ite li­cence that in­cludes both prospect­ing li­cence and cum-min­ing lease. Vedanta Re­sources, a global diver­si­fied me­tals and min­ing com­pany that pro­duces oil, zinc, alu­minium, cop­per, lead and sil­ver has now added gold in its mineral port­fo­lio. The four com­pa­nies that par­tic­i­pated in the auc­tion were Rungta Mines Ltd, Vedanta Lim­ited, Kr­ishna Global Min­er­als Ltd and Sainik Min­ing and Al­lied Ser­vices Ltd.

KARHI CHANDI LIME­STONE AUC­TION – AN­OTHER MILE­STONE FOR CH­HAT­TIS­GARH

The auc­tion of the gold mine fol­lowed briskly on the heels of two ear­lier auc­tions, on Fe­bru­ary 18th and 19th when two lime­stone blocks were suc­cess­fully bid for min­ing lease. Ch­hat­tis­garh recorded yet an­other mile­stone when the Karhi Chandi lime­stone mine be­came the first non-coal min­ing lease to be auc­tioned in In­dia. It saw ag­gres­sive bid­ding from ce­ment man­u­fac­tur­ers. The high­est bid was 58.95% of IBM Price against floor price of 23.60%. The bid­ding went on for more than 5 hours and saw 192 bids be­ing sub­mit­ted. This was fol­lowed by the suc­cess­ful auc­tion of the se­cond mineral block – Kesla Lime­stone Block, in district Raipur, on 19th Fe­bru­ary 2016. The floor price was 5.45% of IBM price and the high­est bid was

10.15%. The bid­ding went on for more than 3 hours and over 50 bids were sub­mit­ted. Shree Ce­ment Lim­ited and Cen­tury Tex­tiles and In­dus­tries Lim­ited were the suc­cess­ful bid­ders for Karhi Chandi and Kesla, re­spec­tively.

BULGING EX­CHE­QUER AND RE­DUCED GOLD IM­PORTS

While Ch­hat­tis­garh is en­dowed with abun­dant coal, baux­ite, iron ore and lime­stone re­serves, the gold mine is a ver­i­ta­ble treasure trove that prom­ises to bring in hefty rev­enues to the State. The mine which is spread over 608 hectares is lo­cated about 130 km northeast of Raipur and is the old­est ex­plored gold de­posit in Cen­tral In­dia which has long been held as hav­ing a com­mer­cial po­ten­tial. Based on ex­plo­ration and avail­able re­ports, it has a re­serve of 2,700 kg of the yel­low metal. In ad­di­tion to the ex­ist­ing roy­alty of Rs 24.70 crore, the auc­tion is ex­pected to make the State Ex­che­quer richer by more than Rs 81.40 crore.

In­dia is the world’s se­cond largest con­sumer of gold. In the face of its in­sa­tiable ap­petite for the metal, the gov­ern­ment raised im­port du­ties and launched a gold mon­eti­sa­tion scheme to mop up and mo­bi­lize an es­ti­mated pool of 20,000 tonnes of gold ly­ing idle in homes and tem­ples. Nei­ther mea­sure met with the an­tic­i­pated suc­cess. In a more re­cent move, the gov­ern­ment an­nounced the of­fer­ing of a to­tal of 100 mineral blocks for ex­plo­ration to pri­vate com­pa­nies in an at­tempt to re­duce de­pen­dence on im­ports.

In­dia im­ports about 1,000 tonnes of gold an­nu­ally, and the pre­cious metal is the se­cond-high­est com­po­nent of the im­ports bill af­ter crude oil. Ac­cord­ing to Su­bodh Singh, State Sec­re­tary Mines, Ch­hat­tis­garh, the de­vel­op­ment of the Bagh­mara gold mine would con­trib­ute to In­dia’s tar­get of re­duc­ing gold im­ports, in ad­di­tion to pro­mot­ing gold, gems and jew­ellery busi­ness in the State. The ex­plo­ration and min­ing of gold would gen­er­ate em­ploy­ment and through the mul­ti­plier ef­fect, en­hance the coun­try’s in­come and wealth.

Ex­plo­ration of gold de­posit was ear­lier car­ried out by direc­torate of ge­ol­ogy and min­ing in erst­while state of Mad­hya Pradesh be­tween 1981 and 1990. Dr. ra­man Singh, the Hon’ble Chief Min­is­ter of Ch­hat­tis­garh ex­plained that the level of ex­plo­ration un­der­taken so far falls un­der G3 cat­e­gory as de­fined in Min­er­als (Ev­i­dence of Mineral Con­tents) Rules, 2015, and it qual­i­fied for auc­tion as a com­pos­ite li­cence. As win­ner of com­pos­ite li­cence, the onus would be on Vedanta Re­sources to carry out de­tailed ex­plo­ration and take the de­posit to a G2 cat­e­gory as stip­u­lated in the Min­er­als (Ev­i­dence of Mineral Con­tents) Rules, 2015.

Industry and eco­nomic ex­perts per­ceive the open auc­tion of the gold mine as the right way for­ward for In­dia. They opine that the na­tional in­come and wealth of the coun­try would be en­hanced by al­lo­cat­ing the ex­plo­ration and ex­ploita­tion rights of such a nat­u­ral re­source to the most ef­fi­cient hands. From a purely eco­nomic per­spec­tive, the auc­tion would en­able the re­al­iza­tion of profit out of the tech­nol­ogy de­vel­oped to ex­ploit th­ese nat­u­ral re­sources and also from the ap­pli­ca­tion of cap­i­tal. Fur­ther, since the gold miner would be a price taker, he can sell the gold only at glob­ally de­ter­mined prices es­tab­lished by mar­ket forces. Hence any roy­alty paid is sim­ply a trans­fer of some por­tion of share­hold­ers’ profits, to the State and the peo­ple. Since the op­er­a­tional en­vi­ron­ment is not en­tirely free mar­ket in the eco­nomic sense, it is cred­i­ble to as­sume that cor­po­ra­tions are the profit max­i­miz­ers.

Based on the cur­rent as­sess­ment, auc­tion of Karhi Chandi block is ex­pected to yield Ru­pees 4,386 crores by way of bid rev­enue to the State Gov­ern­ment. As for the Kesla block, the to­tal in­cre­ment dur­ing the e-auc­tion process al­most dou­bled the bid-rev­enue-re­ceipt of the state from Ru­pees 169 Crores to Rs 314 Crores. Th­ese amounts would be in ad­di­tion to the ex­ist­ing roy­alty, DMF and NMET amounts payable to the state.

MORE AUC­TIONS TO FOL­LOW IN THE MINERAL RICH STATE AND IN­DIA’S POWER HUB

Ch­hat­tis­garh is one of the rich­est State in terms of mineral wealth, with 28 va­ri­eties of ma­jor min­er­als in­clud­ing di­a­monds. Im­por­tant mineral de­posits have been dis­cov­ered in var­i­ous part of the State - no­tably the di­a­mon­dif­er­ous kim­ber­lite in Main­pur, Alexan­drite, one of the rarest gem stones, in Raipur, gold in Son­akhan, iron ore in Kawardha District and work­able de­posits of corun­dum in south­ern Ch­hat­tis­garh.

Ch­hat­tis­garh is the largest coal pro­ducer in the coun­try. While all the tin ore in In­dia is in Ch­hat­tis­garh, the State con­tains a fifth of the coun­try’s iron ore. It ex­ports to Ja­pan one of the world’s best qual­ity iron ore which is present in its Bailadila mines. The State also boasts sub­stan­tial amounts of Baux­ite, Lime­stone, Dolomite and Corun­dum de­posits. The avail­abil­ity of large de­posits of lime­stone, coal and iron ore in close prox­im­ity to each other, makes the State an ideal lo­ca­tion for the low­est cost of pro­duc­tion.

Need­less to say, the State of­fers mon­u­men­tal scope for pri­vate par­tic­i­pa­tion in its min­ing sec­tor. The State’s Mineral Pol­icy has cre­ated a healthy busi­ness en­vi­ron­ment to lure both, do­mes­tic and for­eign pri­vate in­vest­ment in the State so that it may trans­late the State’s nat­u­ral wealth more ef­fi­ciently into pros­per­ity for its peo­ple.

More auc­tion plans are in the pipe­line in re­spect of other such

nat­u­ral re­sources. It is ex­pected that two more lime­stone mines - at Mohra East and Mangsa Pauni Khauna – would be sim­i­larly auc­tioned later this year. Ch­hat­tis­garh plans more auc­tions of baux­ite, lime­stone and other mines in the com­ming years.

THE ALURE OF CH­HAT­TIS­GARH AS AN EN­TREPRENEURIAL HAVEN

What has en­abled Ch­hat­tis­garh to pull of such a dra­matic vic­tory? In the first in­stance, the at­trac­tive poli­cies of the State Gov­ern­ment re­sulted in a large par­tic­i­pa­tion in the bid. Ac­cord­ing to Dr. Ra­man Singh, Hon’ble Chief Min­is­ter of Ch­hat­tis­garh who is also in charge of the min­ing port­fo­lio, “Ease of do­ing busi­ness” in the State with trans­parency in al­lo­ca­tion of mineral re­sources, prag­matic stamp duty pol­icy, avail­abil­ity of power, es­tab­lish­ment of land bank and the e-auc­tion, ex­pe­dited the en­tire process of min­ing lease al­lo­ca­tion. Th­ese very fac­tors make Ch­hat­tis­garh a pre­ferred in­vest­ment des­ti­na­tion.

With a view to en­hance the coun­try’s im­age as a friendly in­vest­ment des­ti­na­tion, the In­dian gov­ern­ment in as­so­ci­a­tion with the World Bank re­leased a state-wise re­port on the “Ease of Do­ing Busi­ness”. Ch­hat­tis­garh ranks 4th with 62.45% on the in­dex. The re­port as­sesses im­ple­men­ta­tion sta­tus of 98-point re­form mea­sures across the fol­low­ing eight ar­eas: Set­ting up a busi­ness, Al­lot­ment of land and ob­tain­ing con­struc­tion per­mit, Com­ply­ing with en­vi­ron­ment pro­ce­dures, Com­ply­ing with labour reg­u­la­tions, Ob­tain­ing in­fras­truc­ture re­lated util­i­ties, Reg­is­ter­ing and com­ply­ing with tax pro­ce­dures, Car­ry­ing out in­spec­tions and En­forc­ing con­tracts. The State pro­vides qual­ity power at 35% lesser cost than all In­dia av­er­age. It of­fers tai­lor-made in­cen­tives for large in­vestors and com­mences busi­ness in real time.

CH­HAT­TIS­GARH MINERAL DE­VEL­OP­MENT COR­PO­RA­TION

Ch­hat­tis­garh Mineral De­vel­op­ment Cor­po­ra­tion Lim­ited (CMDC) is an un­der­tak­ing of the Gov­ern­ment of Ch­hat­tis­garh, reg­is­tered un­der the Com­pa­nies Act, 1956. It was in­cor­po­rated un­der Sec­tion-21 of the Com­pany act 1986 by reg­is­ter of the Com­pany 7-6-2001. CMDC, sin­gle or in joint ven­ture, un­der­takes sci­en­tific ex­plo­ration, com­mer­cial ex­ploita­tion and vi­able trad­ing of min­er­als in the State. It aims to search Ma­jor and Mi­nor min­er­als, and pre­cious stones in the State, to ac­quire min­ing rights for ex­plo­ration, ex­ploita­tion and de­vel­op­ment, to en­hance the pro­duc­tion of min­er­als, to es­tab­lish and pro­mote mineral-based in­dus­tries and lead the coun­try’s min­ing sec­tor. With a ded­i­cated staff skilled in di­verse fields associated with min­ing and min­er­als, it is en­gaged in var­i­ous qual­i­ta­tive & quan­ti­ta­tive as­pects of mineral in­ves­ti­ga­tion in the State.

The op­er­a­tions of CMDC ben­e­fit the large tribal pop­u­la­tion in south­ern Ch­hat­tis­garh. Ch­hat­tis­garh is the only Tin Ore pro­duc­ing State in In­dia. Tin Ore is pur­chased from 5 Tribal co­op­er­a­tive so­ci­eties of the State and its col­lec­tion di­rectly and in­di­rectly ben­e­fits 3000 tribal fam­i­lies in the re­gion. CMCD op­er­ates its Tin Ore Project on a “No profit No Loss” pol­icy for the Trib­als of Bas­tar.

CMCD which op­er­ates Baux­ite mines at Main­pat, Sar­guja Dal­dali, Kawardha, plans to ex­pand its ex­ist­ing work in the en­tire State. With a view to meet­ing the en­tire raw ma­te­rial de­mand of both present and pro­posed in­dus­tries in the State, CMDC pro­poses the open­ing of new baux­ite mines in dif­fer­ent baux­ite bear­ing districts of the state. Ac­cord­ing to a no­ti­fi­ca­tion from the Gov­ern­ment of In­dia, Min­istry of Mines, CMDC also func­tions as an agency for car­ry­ing out ex­plo­ration with­out a valid prospect­ing li­cense.

CMCD has in the pipe­line, the Ari­don­gri and Kabird­ham Iron Ore projects in Kanker and Kabird­ham districts, re­spec­tively. The ore pro­duced from th­ese mines will be supplied to sponge iron and steel plants of Ch­hat­tis­garh. Apart from this, CMDC has also formed a joint ven­ture with NMDC for the de­vel­op­ment and min­ing of iron ore from spe­cific seg­ments of Bailadila de­posit to meet re­quire­ments of lo­cal Sponge iron/ pel­let / steel plants, as well as for the steel plant to be setup by NMDC at Na­gar­nar Bas­tar in Ch­hat­tis­garh.

At present, CMDC, along with the Mad­hya Pradesh State Min­ing Cor­po­ra­tion (MPSMC), also has the Kerwa Coal Block in Korba district, Ch­hat­tis­garh. CMDC will also part­ner the de­vel­op­ment of the pro­posed rail­way line from Raoghat to Jag­dalpur.

DISTRICT MINERAL FOUN­DA­TION TRUST & THE PRIME MIN­IS­TER KHANIJ KSHETRA KALYAN YOJANA

The State Gov­ern­ment con­sti­tuted the District Mineral

Foun­da­tion Trust (DMFT) in Jan­uary 2015 in all the 27 districts of the State for the ben­e­fit of peo­ple and ar­eas af­fected by min­ing. De­spite their hefty con­tri­bu­tion to the wealth of the State, th­ese mineral rich ar­eas have re­mained back­ward in so­cioe­co­nomic de­vel­op­ment. They have been ad­versely im­pacted by min­ing ac­tiv­i­ties like de­creased wa­ter flow, fall­ing ground wa­ter level, ex­cess load on the ex­ist­ing in­fras­truc­ture and re­sources due to trans­port of min­er­als. Now, how­ever, DMFT would en­sure ac­cel­er­ated de­vel­op­ment of th­ese mineral rich ar­eas by tak­ing ap­pro­pri­ate mea­sures to deal with the neg­a­tive ef­fects aris­ing from min­ing ac­tiv­i­ties.

Un­der the DMF, an ac­count has been opened in all 27 districts and the min­ing lease hold­ers have de­posited more than Rs 425 crores as con­tri­bu­tion till now. Nearly Rs.1100 crores con­tri­bu­tion is ex­pected in the year 2016-17. As the min­ing op­er­a­tion in­creases in the up­com­ing years, more con­tri­bu­tion will be re­ceived.

Fur­ther, the func­tions of DMFT will be en­hanced by the Prime Min­is­ter’s Khanij Kshetra Kalyan Yojana (PMKKKY) scheme which is slated to have far-reach­ing ben­e­fits. Through the DMFT, the devel­op­men­tal works in vil­lages like drink­ing wa­ter, en­vi­ron­ment con­ser­va­tion, health, ir­ri­ga­tion and rail­road con­struc­tion will en­sure fast track de­vel­op­ment.

A ju­di­cious ap­proach has been evolved for op­ti­mal utilization of min­ing re­sources for proper in­dus­tri­al­i­sa­tion and eco­nomic de­vel­op­ment, not only of the State, but of the re­gions in the neigh­bour­hood of the min­ing ar­eas that had hith­erto re­mained back­ward.

30% of the roy­al­ties ob­tained from auc­tion­ing of mines will be uti­lized by the DMFS to im­ple­ment the PMKKKY to en­sure so­cioe­co­nomic up­lift­ment of the pop­u­la­tion dwelling in the vicin­ity of the min­ing ar­eas. Devel­op­men­tal and wel­fare pro­grammes will be im­ple­mented in min­ing af­fected ar­eas to en­able the peo­ple to lead health­ier and qual­i­ta­tively, im­proved lives. Work is in progress to­wards min­i­miz­ing and mit­i­gat­ing the neg­a­tive im­pacts from min­ing and re­lated ac­tiv­i­ties, and to main­tain eco­log­i­cal health and bal­ance, aimed to­wards cre­at­ing long term sus­tain­able liveli­hoods for th­ese peo­ple. A ma­jor thrust will be on ar­eas re­lated to good drink­ing wa­ter sup­ply, health care, san­i­ta­tion, women and child care, wel­fare of the aged and dif­fer­ently-abled, ed­u­ca­tion, skill de­vel­op­ment and en­vi­ron­men­tal con­ser­va­tion.

In­fras­truc­tural de­vel­op­ment in the ar­eas af­fected by min­ing ac­tiv­i­ties, has been given a high pri­or­ity. Sub­stan­tial funds will be spent on mak­ing roads, bridges, rail­ways, wa­ter­ways projects, ir­ri­ga­tion and al­ter­na­tive en­ergy sources.

CH­HAT­TIS­GARH WEL­COMES IN­VESTORS

Rec­og­niz­ing the piv­otal role of min­er­als in the in­dus­tri­al­iza­tion of the State, Gov­ern­ment of Ch­hat­tis­garh has for­mu­lated poli­cies that al­low en­trepreneur­ship to flour­ish in an at­mos­phere of ease, sta­bil­ity and cer­tainty. Th­ese poli­cies en­sure elim­i­na­tion of pro­ce­dural hin­drances and trans­parency in de­ci­sion-mak­ing. Fur­ther, the State is en­sur­ing a min­i­mum lease area with se­cured land rights so that in­vestors can safely com­mit large re­sources to min­ing projects. Ac­cord­ing to Chief Min­is­ter Ra­man Singh, the Gov­ern­ment of Ch­hat­tis­garh has adopted a fo­cussed pol­icy ap­proach to­wards real­is­ing the Prime Min­is­ter’s vi­sion of ‘Make in In­dia’. The State’s poli­cies are geared to­wards mak­ing it easy for in­vestors and en­trepreneurs to es­tab­lish busi­ness in the state. Fur­ther, they are putting in place world class in­fras­truc­tural de­vel­op­ment.

Ch­hat­tis­garh wel­comes in­vestors who en­vi­sion plans to add value with down­stream in­dus­tries and those who es­tab­lish ex­por­to­ri­ented mineral-based units in the State. Th­ese en­trepreneurs would have pri­or­ity in sanc­tion­ing of Min­ing Lease and Prospect­ing Lease and would ben­e­fit from the in­cen­tives of­fered to all other in­dus­tries. The State is re­plete with in­fras­truc­tural fa­cil­i­ties in the form of chem­i­cal lab­o­ra­tory to en­able chem­i­cal anal­y­sis of min­er­als and ores, where­withal to con­duct Pet­ro­graphic stud­ies, and drilling divi­sion with all nec­es­sary equip­ments and ameni­ties. Since the tar­get area has been shifted to re­mote ar­eas and deep-seated mineral de­posits, the mineral-search re­quires so­phis­ti­cated tech­nol­ogy. The ex­ist­ing chem­i­cal, petro­log­i­cal and pho­to­ge­o­log­i­cal lab­o­ra­to­ries are be­ing equipped with mod­ern equip­ment to pro­vide lo­gis­tic sup­port to high tech en­trepreneurs ven­tur­ing in the State. Ben­e­fi­ci­a­tion study of the sub­grade ore, sub­sti­tute study for scarce min­er­als and in­dus­trial use of small de­posits are be­ing un­der­taken.

MIN­ING AND ECO­LOG­I­CAL BAL­ANCE

To strike a bal­ance be­tween ecol­ogy and mineral de­vel­op­ment, en­vi­ron­ment aware­ness is be­ing cre­ated. Lease hold­ers are ori­ented to­wards the preser­va­tion of lo­cal eco­log­i­cal bal­ance, and are mo­ti­vated to par­tic­i­pate in af­foresta­tion pro­grammes in de­graded land bank for com­pen­satory af­foresta­tion in ev­ery min­ing block. Lease agree­ments have con­di­tional clauses re­lated to plant­ing and nur­tur­ing of saplings and trees, to dump­ing of waste at ap­pro­pri­ate sites, to proper stack­ing of top soil for use later. Waste re­sult­ing from the min­ing ac­tiv­i­ties would be al­lowed for use on pay­ment of roy­alty as ap­pli­ca­ble to waste ma­te­ri­als. Fur­ther, funds are be­ing ear­marked for ed­u­ca­tion, so­cial is­sues and health haz­ards aris­ing from min­ing and re­lated ac­tiv­i­ties.

H’BLE PRIME MIN­IS­TER SHRI NAREN­DRA MODI, & H’BLE CHIEF MIN­IS­TER CH­HAT­TIS­GARH DR. RA­MAN SINGH, WIT­NESS­ING THE SIGN­ING OF MOU BE­TWEEN GOVT. OF CH­HAT­TIS­GARH, MIN­ISTRY OF STEEL, SAIL, AND NMDC FOR SET­TING UP 3 MT UL­TRA MEGA STEEL PLANT IN BAS­TAR

RA­MAN SINGH, CHIEF MIN­IS­TER, CH­HAT­TIS­GARH

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