Flush with the success of having auctioned four mining blocks, the government has now invited bids for five more. The second phase comes a little over a month after the first phase had been completed with the announcement of who had bid successfully for the four blocks.
All four blocks went to existing Goan firms, and there are no new players that have entered the sector – a fear that had been raised by stakeholders and the people before the auction process started.
The first phase of the auction indicates that either the big players were not serious about mining in Goa or that they were not prepared for stiff competition from the local firms.
One factor that could have led to the old players returning is that these are all brownfield blocks that were auctioned and there was not a single greenfield block.
The winning bidders of the first phase of auctions were also those firms or leaseholders that had been earlier operating these blocks. So, there was some emotional aspect involved in the bidding that could have led to the firms bidding higher just to retain rights on leases that they once held.
But, while the government can claim success in getting the first four blocks auctioned, there is still a cumbersome, long process to be completed before operations can commence in the blocks.
This procedure has to be completed by the winning bidder. The success of the auction, therefore, can be fully gauged only when the winning bidders begin work on the sites, as right now it is only on paper that they have bagged the rights to explore the blocks.
By auctioning four mining blocks and now inviting bids for the second phase, the government is meeting its assurance of commencing mining operations in the state. It will pacify the mining dependents who have been for long demanding the restart of operations.
Yet, it will not happen in the immediate weeks ahead, and there are still many variables involved that could arise as stumbling blocks to the process of actually starting work on the ground.
It is clear in the mining lease auction documents that the successful bidder will have to obtain the Environment Clearance, Forest Clearance and all the other permissions and clearances. Successful bidders will also have to remain aware that environmental concerns do cloud mining operations in Goa.
Flouting any of the environmental norms will not be permitted by the vigilant green crusaders of Goa, who have done an excellent job of protecting the environment.
But there is also another aspect that may have been overlooked. The winning bidder will have to acquire the rights to the land that comprises the mining lease.
It could well be this factor that led to the successful bids to be from those who had operated the leases earlier as the land ownership issue can be quite complex in the state and they are well-versed in how it works. For new firms, this would be far more complex.
The mining lease auction documents of the first phase, released by the state government, made it incumbent for the successful bidder to acquire the land that comprises the mining lease area.
Section 3.5 of the document, reproduced here, stated:
“The Bidders are expected to conduct due diligence regarding the land to be comprised in the mining lease and also familiarise themselves with all Applicable Laws relating to acquisition of rights over such land to be comprised in the mining lease including without limitation, the Act, the Forest Conservation Act, 1980, the Goa Land Revenue Code, 1968, the Goa, Daman and Diu Agricultural Tenancy Act, 1964, the Goa, Daman and Diu Mundkars (Protection from Eviction) Act, 1975, and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation & Resettlement Act 2013.
"At the request and cost of the Successful Bidder, the State Government may consider providing support (without incurring any obligation whatsoever), in its sole discretion, provide assistance regarding acquisition of land comprised in the mining lease.”
The mining sector in Goa has always been a complex one. It will continue to remain so, and there can be no simplification possible.
While the auctions of mining blocks may get a good response from the sector, and the earnest money also deposited with the government, we will have to wait for clearances from the central ministries and for the actual work to start on the ground before we can effectively gauge how fruitful this process has been.
