KOLKATA (miningweekly.com) – India’s Mines Ministry has expressed concern that 16 auctioned mineral blocks have not been developed into operational mines and has convened a high-level meeting for later this week to take stock of the situation.

The Ministry has convened the meeting of the Post Auction Mining Clearance and Approvals Facilitator (PAMCAF) inter-Ministerial group for October 28, wherein it will review each mine development and production agreement signed between successful bidders and the provincial government, a Ministry official said.

Provincial-level Ministers of mining are expected to be present at the meeting, which is aimed at identifying the causes of delays in operationalisation of the auctioned mines. The inter-Ministerial group is aiming to facilitate and empower provinces to cut through the red tape causing delays, he added.

Since February, when provinces were empowered to auction and allocate mines, 16 blocks containing iron-ore, limestome, gold and diamond reserves, have been picked up by ten mining companies.

Of these, seven mines were auctioned by the Karnataka province, in southern India, three in Chhattisgarh, in central India, two in Jharkhand, in the east, and one each in Andhra Pradesh, Odisha, Rajasthan and Madhya Pradesh provinces.

The Mines Ministry is concerned that unless the PAMCAF is effective in fast-tracking the already auctioned mines to production, it will impact investors’ response to the 100 unexplored mineral blocks that are slated to be put under the hammer over the course of the next 12 months.

The Ministry official pointed out that while the 16 blocks auctioned were "discovered" mineral resources, unless they were brought into production, prospective investors would get cold feet in unexplored blocks which in any case have a longer gestation period for development.

The mandate to PAMCAF was simple: ensure already auctioned mines get into production or else future auctions will be in jeopardy, the official said.

In fact, the rounds of auctions held to date have evoked a lukewarm response from investors with as many as 37 blocks not receiving any bids.

The Mines Ministry was seeking to put these 37 unsold blocks up for re-auction again by December but the final decision would be subject to the efforts of PAMCAF as the facilitator, the official added.

The Ministry plans to complete the auction of 55 mineral blocks, excluding coal blocks, during the financial year to March 31, 2017. This is part of the government's initiative to auction 100 mineral blocks, except coal, covering an estimated area of 100 km².