Ministry of Mines
Clarification on the Auction of Nayakkarpatti Tungsten Block of Tamil Nadu
Posted On: 24 DEC 2024 6:11PM by PIB Delhi
Geological Survey of India (GSI) handed over the Geological Memorandum (GM) for Tungsten in Melur – Terkutteru – Muthuvelpatti Areas, Madurai District to State Government Tamil Nadu on 14 Sep 2021, as at that time the state government was empowered to auction all major minerals including critical minerals like tungsten.
Later on, the Mines and Minerals (Development and Regulation) Act, 1957 was amended by the Mines and Minerals (Development and Regulation) Amendment Act, 2023 with effect from 17.08.2023. The Amendment Act, inter alia, inserted section 11D in the Act which empowered the Central Government to exclusively auction mining leases and composite licenses in respect of ‘critical and strategic minerals’ specified in Part D of the First Schedule of the Act. Tungsten is one such critical mineral.
Based on the amendment, Ministry of Mines wrote to State Government Tamil Nadu on 15.09.2023 about the auction of critical mineral blocks of Tamil Nadu including the Nayakkarpatti Tungsten Block. In response, vide letter dated 03.10.2023, Water Resource Minister of Tamil Nadu questioned the amendment act passed by the Parliament and sought that power to auction the critical minerals also be vested with State Governments. It is pertinent to note here that during 2021-2023 when the state had the powers to auction the critical minerals, Tamil Nadu did not do anything. In fact, since the advent of auction regime, Tamil Nadu has not auctioned a single major mineral block in last nine years.
After reply to the Tamil Nadu Minister that as per the law of the land the Government of India will go ahead with the auction of critical minerals, Secretary, Ministry of Mines vide DO letter 6 Dec 2023 to Chief Secretary, Tamil Nadu requested about the details of three critical mineral blocks to be put up for auction including Nayakkarpatti Tungsten Block. Commissioner of Geology and Mining, Tamil Nadu vide letter dated 8 Feb 2024 gave information on these three blocks including Nayakkarpatti Block. Although, State Government informed about the existence of biodiversity site covering an area of 193.215 Ha (about 10% of the total area of the block), but did not recommend against conduct of auction of this block
The Ministry of Mines has successfully conducted auction of 24 blocks of critical and strategic minerals in four tranches till date. The Nayakkarpatti Tungsten Block, Madurai district, Tamil Nadu covering an area of over 20.16 sq. km was proposed for the auction as Composite Licence (CL) in the month of February, 2024 and was notified again for auction as second attempt in June 2024. It was successfully auctioned with Hindustan Zinc Ltd. being declared as the preferred bidder on 07.11.2024. When the block was initially put up for auction in February 2024, until the auction result was declared on November 7, 2024, there was no communication from the State Government regarding any opposition or concerns about the auction despite the fact that Tamil Nadu attended several auction related meetings of Ministry of Mines between February 2024 and November 2024.
It is noteworthy that a composite licence refers to prospecting licence-cum-mining lease, is essentially a two-stage concession granted under Mineral (Auction) Rules. This licence mandates that prospecting (exploration) operations be taken up first. Prospecting starts with a larger area based on preliminary evidences gained from reconnaissance geological survey and ends with establishing mineral content in a relatively smaller defined mineralised zone which is later taken up for mining. However, before a mining lease is granted for the mineralized zone, the composite license holder must obtain several clearances from the respective agencies including (MoEF&CC) and State Government and during that process eco-sensitive zones, biodiversity areas, etc. are removed. State Government always held this right which is usually exercised after exploration stage.
The role of Ministry of Mines is limited to the auction of Critical Minerals in the interest of economic development of the country. Thereafter, issue of the letter of intent (LOI), signing of Composite Licence (CL) and Mining Lease (ML) is done by the State Government. If required, the area can be modified before signing of the Composite Licence or Mining Lease. Once production starts, all the revenue accrues to the State Government.
However, after declaration of preferred bidder for this block, a number of representations have also been received against auction of this block on the ground that there is a biodiversity heritage site within the block area. Therefore, GSI has been requested to re-examine the block and explore the possibility of redefining the block boundary by excluding the bio-diversity site area from the block. Further, the Government of Tamil Nadu has been requested to keep the process of issuing the Letter of Intent to the Preferred Bidder of the Nayakkarpatti Tungsten Block on hold for time being.
*****
Sunil Kumar Tiwari
(Release ID: 2087649) Visitor Counter : 342
