Draft Rules for Offshore Mineral Auction

  • Ministry of Mines administers the Offshore Areas Mineral (Development & Regulation) Act, 2002 [OAMDR Act].
  • Ministry has identified some blocks in the exclusive economic zone of India, i.e., beyond territorial water (12 nautical miles).
  • For the minerals lime-mud & polymetallic nodules.
  • To implement the provisions of the amended Act, the Ministry has framed two draft rules i.e., (i) Offshore Areas Mineral Auction Rules. (ii) Offshore Areas Existence of Mineral Resources Rules.

The Salient Features of Draft Rules:

  • Bidding: The composite licence and production lease shall be granted through an ascending forward online electronic auction.
  • Upfront Payment: Offshore Auction Rules envisage upfront payment for production lease of an amount equal to, lower of 0.50% of the value of estimated resources or rupees 100 crore – payable to the Central Government in three instalments of 20%; 20%; and 60%.
  • Performance Security: Performance security amount will be equal to, lower of (a) 0.50% of the value of estimated resources or rupees 100 crore in the case of production lease; and (b) 0.25% of the value of estimated resources or rupees 50 crore in the case of composite licence.
  • Net worth requirements for the auction of production lease will depend on the value of estimated resources in the block. However, the net worth requirement will not exceed Rs. 200 crore rupees.
  • Net worth requirements for the auction of the composite licence will depend on the value of estimated resources in the block. However, the net worth requirement will not exceed Rs. 100 crore rupees.
  • For blocks whose estimated quantity of mineral resources is not possible to be assessed for calculating the value of estimated resources, the net worth requirement would be Rs. 25 crores.
  • Bid Security: Shall be for an amount equivalent to 0.25 per cent of the value of estimated resources or Rs.10 crore, whichever is lower.
  • For blocks whose estimated quantity of mineral resources is not possible to assess for calculating the value of estimated resources, the bid security shall be Rs.5 lakh per standard block.
Posted in Current Affairs.