Tender Document | Queries and Responses
S. No. Reference to
1 Clause 2.15
of
Model
Tender
Document
for Auction
of Iron Ore
Block
Query
"Specified End Use Plant" shall mean an integrated steel plant of the
Bidder located in India.
What is the definition of Integrated Steel Plant? Will any independent
plant (Sponge Iron, Pellet plant, Pig Iron), individually using Iron ore as
raw material, be allowed to participate in the auction?
Can a company producing steel through DRI induction furnace route and
having other ancillary manufacturing facilities such as rolling mill, Captive
Power plant, comes under the definition of integrated steel plant or not?
Response
The following extract of the Notification
dated April 24, 2015 of the Ministry of
Steel, Government of India and
published in the Gazette of India on 22nd
May,2015 provides the definition of an
Integrated Steel Plant.
Integrated Steel Producers – Primary steel
producers having a minimum capacity of one
million tonnes per annum (1 MTPA) in
terms of crude steel.
Primary Steel Producers – Steel producers
of any capacity, irrespective of process route,
starting their operations from iron making
using iron ore, virgin or processed, with
necessary
refining
facilities
and
rolling/processing facilities, at a single
location or else in multiple locations provided
that the entire gamut of iron & steel
production, from iron making to finished steel
production, is owned by the same company or
its subsidiary company(ies). Provided that the
iron making capacity is sufficiently matching
the
steelmaking
capacity.
Further,
downstream units should use material from
the upstream units of the same company or
its subsidiaries.
2 Clause 2.15 "Specified End Use Plant" shall mean an integrated steel plant of the Clause 5 (c) of the tender document states
of
Model Bidder located in India
that ‘Bidder having Specified End Use Plant
Tender
Will a proposed steel plant/steel plant under construction qualify the shall be eligible to participate in e-auction’
Page | 1
S. No.
Reference to
Document
for Auction
of Iron Ore
Block
3 Clause 2.15
of
Model
Tender
Document
for Auction
of Iron Ore
Block
Query
criteria of the Specified End Use Plant?
Response
i.e. the bidder shall have an existing
integrated steel plant at the time of
submission of the Bid.
“Specified End Use Plant” shall mean an integrated steel plant of the
Bidder located in India. Whether mineral can be used in multiple Specified
End Use Plants in multiple States in India “Specified End Use Plant(s)”
shall mean all integrated steel plants of the Bidder located anywhere in
India. To have no ambiguity in future.
Specified End Use Plant shall mean an
integrated steel plant of the Bidder
located in India as defined by the
Ministry of Steel, Govt. of India.
4 Clause 2.15
of
Model
Tender
Document
for Auction
of Iron Ore
Block
5 Clause 2.19
of
Model
Tender
Shall any preference be given to plant situated in Orissa? Preference No. The Successful Bidder shall be
should be given to plant situated in Odisha.
decided solely on the basis of financial
Based on the assurances of the Government of Odisha the Entrepreneurs bid submitted by the eligible Bidders.
have set up the Integrated Steel Plant in Odisha.
Also, please refer to sub-rule 4 of rule 6 of
Mineral Auction rules, 2015 which states
that
“Where the State Government reserves a
mine or mines for any particular specified end
use, the minerals
extracted under the mining lease shall, (i) be utilised solely for the specified end use;
and
(ii) not be sold or transferred or otherwise
disposed of, either directly or indirectly”
“Value of Estimated Resources” means an amount equal to the product of As per sub-rule (m) of Rule 2 of Mineral
i. the estimated quantity of mineral resources for which the mineral block (Auction) Rules, 2015, the value of
is being auctioned, expressed in metric tonne; and ii. the average price per estimated resource has been estimated
Page | 2
S. No.
Reference to
Document
for Auction
of Iron Ore
Block
Query
metric tonne of such mineral as published by IBM for State of Odisha for a
period of twelve months immediately preceding the month of computation
of the Value of Estimated Resources i. NIT was issued on 23rd December,
2015. Is the average price considered for valuation & upfront payment is
the IBM published price for the period December, 2014 to November, 2015
(month-wise).ii. IBM publishes grade-wise prices separately for lumps &
fines. Whether the estimated value has also been computed on lumps &
fines. If so, lumps & fines have been considered in what proportion. Also,
whether it has been computed considering value of 84.92 MT at price for
62-65 grade and that of 14.67 MT at price applicable for below 55% grade.
Computation of value may be shown to the prospective bidders.
As stated in the Tender document/ GR, the reserve is predominantly
powdery ore. Lump recovery may not be even 25%.
Response
based on the average price per metric
tonne of relevant grades of iron ore as
published by Indian Bureau of Mines for
Odisha for a period of twelve months
immediately preceding the month of
auction process and the quantity of iron
ore grades as per the Geological Report.
The average prices per metric tonne of
relevant grades available at the time of
issuing Tender Documents were used for
computation of value of estimated
resources.
As per the Summary of the Mineral Block
of Ghoraburhani-Sagasahi available in
public domain on MSTC e-auction portal
(and the Geological Report as part of
paid Tender Document), the total iron ore
resources are 99.59 million tonnes (at 55%
Fe cut off is 84.92 million tonnes with Fe:
63.23% and at 45 to 55% Fe cut-off is 14.67
million tonnes with Fe: 49.97%). The
average price per metric tonne of relevant
grades of iron ore for Odisha is published
by Indian Bureau of Mines.
Value of estimated resource is a weighted
average of values of these two grades
and tonnage.
As per the Geological Report, both
Page | 3
S. No.
Reference to
6 Clause 2.19
of
Model
Tender
Document
7 Clause 2.19
of
Model
Tender
Document
for Auction
of Iron Ore
Block
Query
“Value of Estimated Resources” means an amount equal to the product of,
- i. the estimated quantity of mineral resources for which the mineral block
is being auctioned, expressed in metric tonne; and ii. the average price per
metric tonne of such mineral as published by Indian Bureau of Mines for
the State of Odisha for a period of twelve months immediately preceding
the month of computation of the Value of Estimated Resources.
The breakup of estimation of value of resources should be provided with
grade and quantity.
“Value of Estimated Resources” means an amount equal to the product of,
-i. the estimated quantity of mineral resources for which the mineral block
is
being
auctioned,
expressed
in
metric
tonne;
and
ii. the average price per metric tonne of such mineral as published by
Indian Bureau of Mines for the State of Odisha for a period of twelve
months immediately preceding the month of computation of the Value of
Estimated Resources.
Response
grades are fines.
As per sub-rule (m) of Rule 2 of Mineral
(Auction) Rules, 2015, the value of
estimated resource has been estimated
based on the average price per metric
tonne of relevant grades of iron ore as
published by Indian Bureau of Mines for
Odisha for a period of twelve months
immediately preceding the month of
auction process and the quantity of iron
ore grades as per the Geological Report.
As per the Summary of the Mineral Block
of Ghoraburhani-Sagasahi available in
public domain on MSTC e-auction portal
(and the Geological Report as part of
paid Tender Document), the total iron ore
resources are 99.59 million tonnes (at 55%
Fe cut off is 84.92 million tonnes with Fe:
63.23% and at 45 to 55% Fe cut-off is 14.67
million tonnes with Fe: 49.97%). The
average price per metric tonne of relevant
grades of iron ore for Odisha is published
by Indian Bureau of Mines.
As per sub-rule (m) of Rule 2 of Mineral
(Auction) Rules, 2015, the value of
estimated resource has been estimated
based on the average price per metric
tonne of relevant grades of iron ore as
published by Indian Bureau of Mines for
Odisha for a period of twelve months
Page | 4
S. No.
Reference to
Query
Value of Estimated resources is Rs.18,524.92 crores. How was this value
calculated? IBM notifies price for different grades. What was the assumed
grade?
Was it the average grade of the deposit as published in the GR?
Mine block summary shows that there are two grades of resources, the
first with an average of 63.23% Fe having a resource of 84.92MT and the
second with an average grade of 49.97% Fe having a resource of 14.67MT.
Was the VoER a weighted average of the values of these two grades and
tonnages?
IBM publishes prices for lumps and fines separately. What assumptions
were made with regard to the physical size of constituent ore i.e., what
lump:fines ratio was assumed?
Value of Estimated resources is an
important figure as all other values are derived from this figure. Hence it
becomes important to understand the logic of calculation of this figure
which has a bearing on the upfront payment, performance security which
is a hefty sum.
Response
immediately preceding the month of
auction process and the quantity of iron
ore grades as per the Geological Report.
The average prices per metric tonne of
relevant grades available at the time of
issuing Tender Documents were used for
computation of value of estimated
resources.
As per the Summary of the Mineral Block
of Ghoraburhani-Sagasahi available in
public domain on MSTC e-auction portal
(and the Geological Report as part of
paid Tender Document), the total iron ore
resources are 99.59 million tonnes (at 55%
Fe cut off is 84.92 million tonnes with Fe:
63.23% and at 45 to 55% Fe cut-off is 14.67
million tonnes with Fe: 49.97%). As per
the Geological Report, both grades are
fines. The average price per metric tonne
of relevant grades of iron ore for Odisha
are published by Indian Bureau of Mines.
Value of estimated resource is a weighted
average of values of these two grades
and tonnage.
8 Clause 5 of Eligibility (b) The Bidder must meet the terms and conditions regarding Bidder with an integrated steel plant on
Model
eligibility as stipulated in Schedule I of the Mineral (Auction) Rules, 2015 its balance sheet is eligible to participate
Tender
for e-auction of Mineral Block for grant of mining lease as quoted below. in the auctions.
Document
Accordingly, the net worth of the Bidder must be more than INR [amount
in figures] (Rupees [amount in words])
The net worth of the Bidder or its
Page | 5
S. No.
Reference to
Query
a. The Value of Estimated Resources is more than Rupees 25 Crore, the
applicant, including an individual, shall have a net worth more than 4% of
Value of Estimated Resources.
Explanation:
(1) In case an applicant is a subsidiary of another company incorporated in India,
the net worth of such holding company may also be considered:
Provided that, in such case, the applicant must continue to be a subsidiary of such
holding company until such time the applicant meets the aforementioned net
worth threshold.
There is no clarity with regard to joint venture company created by 2 or
more companies having the same End Use can participate in the auction of
mineral
resources
for
their
respective
EUP.
Whether the bidder company can add the Net Worth of –
(a) only its immediate holding company; (b) only its ultimate holding
company (c) or both.
Whether two or more eligible companies can apply or participate
jointly/through a joint venture company in the bidding process or not.
9 Clause 5 of Eligibility (c) The Mineral Block has been reserved for Specified End Use
Model
pursuant to the proviso to sub-section (6) of Section 10B of the Act read
Tender
with sub-rule (3) of rule 6 of the Mineral (Auction) Rules, 2015. The Bidder
Document
having a Specified End Use Plant shall be eligible to participate in efor Auction auction.
of Iron Ore
Block
There is no clarification made under the clause for the quantity of fines will
be generated during mining and calibration which may be anticipated as
25-30% as the ore is soft type. And if the EUP has no facility to consume
the fines. What is the process of disposal of fines?
Response
immediate holding company (having
more than 50% shareholding), shall be
considered.
Explanation 1 under Schedule I of
Mineral Auction Rules, 2015 states
‘In case an applicant is a subsidiary of
another company incorporated in India, the
net worth of such holding company may also
be considered’
Please refer to sub-Rule 4 of Rule 6 of
Mineral (Auction) Rules, 2015, which
states that
“Where the State Government reserves a
mine or mines for any particular specified end
use, the minerals extracted under the mining
lease shall, (i) be utilised solely for the specified end use;
and
(ii) not be sold or transferred or otherwise
disposed of, either directly or indirectly”
10 Clause 5 of Eligibility-The Bidder having Specified End use Plant shall be eligible to Bidders having Specified End Use Plant
Model
Participate in e-Auction.
shall be eligible to participate in eTender
auction.
Page | 6
S. No.
Reference to
Document
for Auction
of Iron Ore
Block
Query
Response
How to calculate the plant capacity. What are the consumption norms for Eligibility is not linked to the plant
calculation of Iron Ore in an integrated steel plant with regard to capacity of the Specified End Use Plant.
consumption in DRI Kiln, Sinter Plant & Blast Furnace.
Does it have any relation with regard to the capacity of each unit of the
plant. How to calculate consumption of Iron Ore having different grade.
11 Clause 5 of Whether a new joint venture company created by two or more existing
Model
steel plant company can participate in the auction or not?
Tender
Whether an old joint venture company created by two or more existing
Document
steel plant company can participate in the auction or not?
12 Clause 5 of Eligibility (b) The Bidder must meet the terms and conditions regarding
Model
eligibility as stipulated in Schedule I of the Mineral (Auction) Rules, 2015
Tender
for e-auction of Mineral Block for grant of mining lease as quoted below.
Document
Accordingly, the net worth of the Bidder must be more than INR [amount
in figures] (Rupees [amount in words])
a. The Value of Estimated Resources is more than Rupees 25 Crore, the
applicant, including an individual, shall have a net worth more than 4% of
Value of Estimated Resources.
Kindly clarify whether CA Certificate certifying the December 2015
balance sheet (Net Worth) will be acceptable as qualifying criteria to
participate in the bidding process.
13 Clause 8 of 8(1) A (e): First Round of E-Auction: Provided that where the total number
Model
of Technically Qualified Bidders is less than three, then no Technically
Tender
Qualified Bidder shall be considered to be Qualified Bidder and the eDocument
auction process shall be annulled:
In case e-auction process is annulled due to less nos. of TQBs and bid
process is started again, will fresh tender documents need to be purchased
again?
When the block is put to auction again the bidder who has purchased the
tender document in the previous auction will not be required to pay the
tender document fees afresh?
Bidder with an integrated steel plant on
its balance sheet is eligible to participate
in the auctions.
Please refer to the Explanation 2 under
Schedule I of the Mineral Auction Rules
2015 which states that
‘In case of a Company, the Net worth shall be
the sum of paid up share capital and the free
Reserves as per the audited Balance Sheet of
the immediately preceding financial year.’
The tender fee is a non-refundable. Every
auction process is an independent
process governed by the respective
tender document.
Page | 7
S. No. Reference to
14 Clause 8 of
Model
Tender
Document
Query
8(A) (a): First round of e-auction
The duly executed original physical copy of the Technical Bid must be sent
to the address specified in Clause 13.1.2 so that they are received on or
prior to the Bid Due Date, failing which the Technical Bid shall be deemed
to be not received.
For physical submission of original documents 2 more working days may
be allowed after the bid due date for submission of Bid documents to take
care of time taken for postal deliveries from distant places.
15 Clause 9 of 9.1 ii Sale price of the mineral (grade-wise for Orissa) as published by
Model
Indian Bureau of Mines for such month of despatch.
Tender
IBM provides grade wise average sales of iron ore for major iron ore
Document
producing states in India. Since now monthly payments by successful
bidder would be linked with selling price, it is suggested that IBM may be
requested to tabulate prices for every 1 % increase in Fe %, starting from
lowest Fe % present in the mines being put up for auction.
16 Clause 10 of 10.3 Execution of Mine Development and Production Agreement:
Model
The State Government and the Successful Bidder shall enter into the
Tender
MDPA upon the Successful Bidder having obtained all consents,
Document
approvals, permits, no-objections and the like as may be required under
Applicable Law for commencement of mining operation. What if the lessee
is unable to get a clearance because of circumstances beyond his control?
For e.g., FC may be denied because of a go/ no go area decision by MoEF
or Public Consultation required for obtaining EC not happening? Will the
successful bidder be reimbursed the 2 instalments of upfront payment?
How will the Performance security be treated in such a case?
17 Clause 10 of 10.3 Execution of Mine Development and Production Agreement: The
Model
State Government and the Successful Bidder shall enter into the MDPA
Tender
upon the successful Bidder having obtained all consents, approvals,
Document
permits, no-objections and the like as may be required under Applicable
Law for commencement of mining operation.
Whether the consents & approvals required for entering into MDPA
Response
As per existing provisions of tender
document.
Not related to any provisions of the
Tender Document.
As per provisions of tender document.
Bidders can utilize the time lag between
the Conclusion of Stage I and the Start of
Stage II to obtain all consents, approvals,
permits, no-objections and the like as
may be required under applicable laws
for commencement of mining operations.
Page | 8
S. No.
Reference to
18 Clause 11 of
Model
Tender
Document
19 Clause 11 of
Model
Tender
Document
20 Clause 11 of
Model
Tender
Document
21 Clause 13 of
Query
include Environmental Clearance and Forestry Clearance also?
Environmental clearance and Forestry Clearance shall be based on
approved Mining Plan. The time gap between submission of Mining Plan
and entering into MDPA is only 20 days (Ref: Clause 11, Timetable- Stage
II)
Time Table--Stage-II Process for Grant of Mining Lease
Point No -2 and Point-3 Is there any Time period in between letter of intent
by State government and T1. Time period has to be defined in between
letter of intent by State government and T1, T1 is related to MDPA and all
statutory clearance.
Time Table - As per the existing clause: The information to the Qualified
Bidders one day prior to the scheduled date of e-auction of the respective
mineral Block. At least 2 days’ time should be given between the
intimation and the scheduled date of e-auction
Timetable
Stage-II
Process
for
granting
of
mining
lease
S.No.2: Issuance of order by State Government acknowledging Preferred
Bidder as the Successful Bidder subject to compliance with all the terms
and conditions of eligibility –T1+10
S.No.3: Mine Development Production Agreement (MDPA) to be executed
between State Government & Successful Bidder upon obtaining all
consents, approvals, permits, no-objections from various government
agencies/departments required under applicable laws for commencement
of mining operations. –T1+20
Soon after issuance of order acknowledging preferred bidder as successful
bidder, the successful bidder has to obtain necessary clearances viz., FC,
EC etc., which will take minimum 5 years. Sl.No.3 cannot be T1+20.
How much time is being reserved for bidder to obtain all necessary
clearances?
Sl. No. 2 & 3 may be separated by another stage. In this stage the successful
bidder will obtain all necessary clearances.
13.7 Verification by State Government and disqualification
Response
As per existing provisions of tender
document.
As per existing provisions of the tender
document.
As per existing provisions of the tender
document. Bidders can utilize the time
lag between the Conclusion of Stage I
and the Start of Stage II to obtain all
consents,
approvals,
permits,
noobjections and the like as may be
required under applicable laws for
commencement of mining operations.
If required, the State Government may
Page | 9
S. No.
Reference to
Model
Tender
Document
Query
13.7.1. The State Government reserves the right to verify all statements,
information and documents submitted by the Bidder in response to the
Tender Document and the Bidder shall, when so required by the State
Government, make available all such information, evidence and
documents
as
may
be
necessary
for
such
verification
13.7.2. The State Government reserves the right to reject any bid, and
appropriate the entire Bid Security if: (a) at any time, a misrepresentation
is made or uncovered, (b) the Bidder does not provide, within the time
specified by the State Government, the supplemental information sought
by the State Government for evaluation of the bid, or (c) any act or
omission of the Bidder results in violation of or non-compliance with the
Act, the rules thereunder, this Tender Document, or any other document
referred therein or issued pursuant thereto or any Applicable Law relevant
for
the
tender
process.
13.7.3. Any rejection of a bid under Clause 13.7.2 may lead to the
disqualification of the Bidder from bidding for any auction or allotment
conducted by the State Government for a period of 5 years starting from
the date of appropriation of the Bid Security or any other earlier date
specified by the State Government.
Will an opportunity be given to the bidder to cure the defects that may be
pointed out in his technical bid before being disqualified?
The bidder shouldn’t be disqualified for 5 years but he may be disqualified
from the current bid.
22 Clause
13 In case of Bidder being a company, a power of attorney in the format
and Schedule specified in Annexure III of Schedule I (Format of power of attorney)
I of Model authorising the signatory of the bid to participate in the tender process and
Tender
do all acts pursuant thereto on behalf of the Bidder, including usage of the
Document
digital signature on behalf of the Bidder. In case of Bidder being an
individual, power of attorney would not be required but such individual
must personally sign;
Response
seek
any
additional
documents/
information/ clarification as per the
Tender Document.
Any disqualification shall be in
accordance with existing provisions of
the tender document.
The person using Digital Signature
Certificate for bid submission on behalf
of Bidder should also be a person duly
authorised by the Bidder through a
Power of Attorney.
While all references of Power of Attorney in the Tender Document speak
Page | 10
S. No.
Reference to
Query
Response
of authorising the signatory to sign bids including usage of DSC, the
Format of Power of Attorney does not have any reference to the Digital
Signature Certificate. Please clarify.
23 Schedule I of Format of Technical Bid B Instructions for submission of the Bid Letter
Model
d iii [Turnover and net worth certificate issued by: (a) statutory auditors of
Tender
the Bidder (which is a company); or (b) a chartered accountant or a
Document
merchant banker registered with the Securities and Exchange Board of
India – in case Bidder is an individual.] OR1 [Certificate regarding the total
amount as closing cash balance issued by a chartered accountant or a
merchant banker registered with the Securities and Exchange Board of
India.]
Format of Statutory Auditor Certificate may kindly be shared
24 Schedule I of Format of Technical Bid B. Instructions for submission of the bid letter (d)
Model
Documents to evidence compliance with the eligibility conditions must be
Tender
enclosed with the bid letter, duly certified by the Authorised Signatory of
Document
the Bidder, in case the Bidder is a company, or self-attested in case the
Bidder is an individual.
What is the document envisaged for details of the end use plant? Is the
Environmental Clearance obtained for the integrated steel plant a
sufficient document for proving capacity of the end use plant?
25 Schedule I of Annexure I: Format of Bid Letter
Model
We undertake that the minerals extracted under the mining lease shall: (i)
Tender
be utilised solely for the specified end use; and (ii) not be sold or
Document
transferred or otherwise disposed of, either directly or indirectly.
Can a successful bidder use ore from this block in an integrated steel plant
of the same bidder not mentioned in the bid letter and which may come up
in future?
26 Schedule I of Annexure I: Format of Bid Letter
Model
We undertake that the minerals extracted under the mining lease shall: (i)
Tender
be utilised solely for the specified end use; and (ii) not be sold or
Specific format is not prescribed.
However, the certificate should contain
the requisite details as per the Tender
document.
Certificate from Statutory Auditor of the
company. Self-certified true copy of
Consent to Operate certificate from
respective State Pollution Control Board
shall also be accepted.
After becoming successful bidder, the
bidder can use ore from the block in the
Integrated Steel Plant owned by him.
Please refer to sub-rule 4 of rule 6 of
Mineral Auction rules, 2015 which states
that
Page | 11
S. No.
Reference to
Document
27 Schedule IV
of
Model
Tender
Document
28 Schedule IV
of
Model
Tender
Document
Query
transferred or otherwise disposed of, either directly or indirectly.
Whilst most of the ore will be consumed in the end use plant of the bidder,
will the bidder be permitted to supply ore to its affiliate companies in
which the bidder may hold more than 50% interest.
Will the name of affiliate plants need to be declared now itself along with
the details of the end use plant?
What if such affiliates are not integrated steel plants but are pig iron
producers/sponge iron producers? Supply to such affiliates may be
permitted. Supply to such affiliates may be permitted.
As per Rule 24 B of MCR, 1960 “Own Industry” means an industry of
which the lessee is the owner or in which he holds not less than fifty
percent of controlling interest.
MDPA-Schedule E Minimum Production requirement
Value of Performance Security to be appropriated
24% of Average sale price of mineral published by IBM during the year of
shortfall (X) shortfall in production [minimum production requirement
(minus) actual annual production]
Penalty should only be charged on the basis of loss of revenue rather than
flat 24% basis. Value of Performance Security to be appropriated
% Quoted by the successful bidder in the final price offer (X) Average sale
price of mineral published by IBM during the year of shortfall (X) shortfall
in production [minimum production requirement (minus) actual annual
production]
The loss of revenue to the government is only in tune of % of Average Sale
Price (Based on Final price offer). So the penalty should only be taken on
this loss not on flat 24% basis.
MDPA Clause 8.3 - Minimum Production requirement
Any non-compliance with the Minimum Production Requirement would
result in appropriation of the Performance Security in the manner
stipulated in
Clause 4 (PERFORMANCE SECURITY AND
APPROPRIATION) and in case where non-compliance with the Minimum
Response
“Where the State Government reserves a
mine or mines for any particular specified end
use, the minerals extracted under the mining
lease shall, (i) be utilised solely for the specified end use;
and
(ii) not be sold or transferred or otherwise
disposed of, either directly or indirectly”
As per existing provisions of tender
document.
As per provisions of tender document
Page | 12
S. No.
Reference to
29 Model
Tender
Document
30 Model
Tender
Document
Query
Response
Production Requirement exceeds more than five instances during the term
of the lease or occurs consecutively for three years, such non-compliance
shall give the State Government a right to terminate the mining lease
without prejudice to any other proceedings to be taken against the mining
lease holder.
It is suggested that mine lease not be terminated in case of 5 breaches of
the production requirement.
If this is not conceded at least the number of non-compliance be increased
to 10.
Does it exclude breaches happening under conditions of force majeure?
Any non-compliance with the Minimum Production Requirement would
result in appropriation of the Performance Security in the manner
stipulated in
Clause 4 (PERFORMANCE SECURITY AND
APPROPRIATION) and in case where non-compliance with the Minimum
Production Requirement exceeds more than five instances (excluding
instances when breach is on account of force majeure conditions and
conditions which are beyond the control of lessee) during the term of the
lease or occurs consecutively for three years, such non-compliance shall
give the State Government a right to terminate the mining lease without
prejudice to any other proceedings to be taken against the mining lease
holder.
In the Tender Document, there is no embargo on the maximum number of As per the Tender Document, there is no
mines / linkages of a particular mineral a company can hold.
such restriction. Lease grant is subject to
compliance with Section 6 of the MMDR
Act, 1957.
Suitable clause to be inserted to exempt successful bidders from any As per existing provisions of the tender
penalty for the delay in operationalising the mine, due to delay beyond document.
control of the successful bidder like delay in getting approvals, clearances
etc.
Page | 13
S. No. Reference to
31 Mine
Summary of
Iron
Ore
Block
Query
Draft Response
Summary of Mineral Block Part C –
Particulars of land
Total Concession area is 139.165 Ha; Government land is 110.885 Ha
Whether the Government land will be given on 50 years lease? If so, what will be the  Yes, Rent & other
rent & other terms?
terms will be as per
applicable law.
Can Forest Department change the status of Government land after the auction  Govt. land includes
process is concluded?
both Forest land and
land belonging to
Deemed forest
category (DLC Forest)
and non-forest land as
well.
May be explicitly cleared that the government land of 110.698 Ha is not forest land  Forest Clearance is
including DLC land and no Forestry Clearance shall be required for this 110.698 Ha.
required over that part
of Govt. land which
comes under Forest
land as recorded prior
to dt.25.10.1980.
Shall it be possible to execute lease separately for forest & non-forest land.

No.
How the Gochar and Sarvasadharan land including Shamshan rights will be
transferred to the lessee for mining?
Encroachments have been observed on some government land. Will Government
transfer the land to lessee free of these encroachments?
To have clarity on the issue.
Forest department may raise claim on certain areas to be forest depending on the
physical status of land i.e. presence of thick vegetation as has been observed in some
cases.
It is learnt that about 105.252 Ha out of 110.698 Ha land is DLC land.

As per applicable law.

No. Surface
permission will be
accorded as per
applicable law.
Page | 14
S. No.
Reference to
Query
Forest land is only 15% of total area. Any delay in getting Forest Clearance will delay
the entire project.
Gochar and Sarvasadharan land needs transfer of rights.
Encroachment is serious issue and a lessee shall have no means to get rid of it on its
own.
3.5: Use of minerals in End use plant
If there is a sub-grade mineral which is not of use to the steel plant, can such sub grade
ore be sold in the open market with the prior approval of the State Government? This
will add to the revenue of the State Government when lessee pays royalty for such
mineral.
32 Clause 3 of
Model Tender
Document for
Auction
of
Iron
Ore
Block
33 Clause 3 of 3.6 The Bidder is expected to carry out due diligence regarding the land schedule and
Model Tender the legal provisions relating to acquisition of the surface rights over such land, such as
Document
the Mines and Minerals (Development & Regulation) Act, 1957, Forest Conservation
Act, 1980, Panchayats (Extension to the Scheduled Areas) Act, 1996, Orissa Regulation
-2 of 1956, (The Orissa Scheduled Areas Transfer of Immovable Property (By
Scheduled Tribes) Regulations, 1956, the Orissa Land Reforms Act 1960" and "The
Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation &
Resettlement Act 2013") etc. as may be applicable. Wherever acquisition of land under
the provisions of the Act No.13 of 2013 by the State Government may be required
assistance for such acquisition may be provided by the State Government at the cost of
Successful Bidder.
A total of 7.582Ha of land has been listed as tenanted private revenue land, 20.885 Ha
as Gramya jungle and Patra jungle, 110.698 Ha as Govt. land of which 3.444Ha is
Gochar land.
How much of the 7.582 hectares belongs to Scheduled tribes?
Is there any legal bar in granting such land under mining lease to a Company?
Will the Govt. of Odisha assist the successful bidder in acquisition of such land? Can
area earmarked for Gochar be given as a mining lease?
110.698 Ha categorisation as Govt. land under various other sub-heads is as per Hal
settlement or Sabik Settlement?
Draft Response
Use of minerals will be
strictly as per the
provisions of sub-rule (4)
of Rule 6 of Mineral
(Auction) Rules, 2015.
The Land Schedule
furnished reflects details of
the land and tenancy
thereof.
There is no legal bar for
grant of mining lease over
the identified area under
the provisions of MMDR,
Act, 1957. Govt. of Odisha
will extend necessary
assistance to the successful
bidder for acquisition of
land.
The land schedule has
been prepared as per Hal
Settlement records. In case
of any change in the
categorisation of land as
per Sabik records the same
Page | 15
S. No.
Reference to
34 Clause 4 of
Model Tender
Document
35 Clause 4 of
Model Tender
Document
36 Clause 5 of
Model Tender
Document
Query
If categorisation is as per Hal settlement, what is the nature of this land under Sabik
records?
4.1. The following information regarding the Mineral Block is included in a separate
“Information Memorandum” attached along with this Tender Document as Schedule
V: precise map of the Mineral Block identified including geographical co-ordinates,
revenue survey particulars, demarcated using total station and differential global
positioning system and divided into forest land, land owned by the State Government
and land not owned by the State Government;
There is no precise map of the Mineral block has been provided as per the provision
Cl. 4.1(i) Precise map of the Mineral Block identified including geographical coordinates, revenue survey particulars, demarcated using total station and DGPS and
divided into forest land, land owned by the State Government and land not owned by
the State Government.
The block boundary has not been defined as per geographical co-ordinates. The block
boundary along with Geographical co-ordinates has to be provided as committed in
the Information Memorandum. The co-ordinates are a must to demarcate the block
exactly.
5 (b) (e): Eligibility - The Bidder shall comply with Section 6 of the Act.
The State Government may not be able to issue the letter of intent without prior
approval from the Central Government in case the Bidder holds or may hold
(including the area covered under the mining lease being auctioned under this tender
document) one or more mining leases covering a total area of more than ten square
kilometres in respect of any mineral or prescribed group of associated minerals in the
State of Odisha. Section 6 of Act does not restrict State Government to issue letter of
intent. Relaxation under Section 6, if required, should be obtained by the State
Government from the Central Government. Such relaxation should be taken after
issuance of Letter of intent to the preferred bidder. The State Government will issue
letter of intent to the preferred Bidder. In case the Bidder holds or may hold (including
the area covered under the mining lease being auctioned under this tender document)
one or more mining leases covering a total area of more than ten square kilometres in
respect of any mineral or prescribed group of associated minerals in the State of
Draft Response
will be intimated.
The DGPS Survey map has
now been made available
under the paid document
category.
The DGPS Survey map has
now been made available
under the paid document
category.
Area limit as per Section 6
(1) of MMDR Act,1957 will
be applicable.
Page | 16
S. No.
Reference to
37 Clause 5 of
Model Tender
Document
38 Clause 8 of
Model Tender
Document
39 Clause 10 of
Model Tender
Document
40 Clause 10 of
Model Tender
Document
Query
Odisha, the State Government shall obtain relaxation under section 6 of the Act from
the Central Government. MCR 1960 also envisages such relaxation to be obtained by
State Government.
5(e) Eligibility - The Bidder shall comply with Section 6 of the Act.
The State Government may not be able to issue the letter of intent without prior
approval from the Central Government in case the Bidder holds or may hold
(including the area covered under the mining lease being auctioned under this tender
document) one or more mining leases covering a total area of more than ten square
kilometres in respect of any minerals in the State of Odisha. Who shall obtain the prior
approval of Government of India? Whether State Government on request by the
Bidder or it has to be obtained directly by the Bidder. To have clarity into the matter.
8.2: Discovery of new mineral
Provided that where, subsequent to the e-auction, any new major mineral is
discovered, then the holder of mining lease shall follow the provisions of the Act and
the rules made thereunder for inclusion of such new mineral in the Mining Lease
Deed.
Will the bidder be allowed to sell such discovered mineral which may not be useful in
integrated steel plant?
Provided that where, subsequent to the e-auction, any new major mineral is
discovered, then the holder of mining lease shall follow the provisions of the Act and
the rules made thereunder for inclusion of such new mineral in the Mining Lease
Deed. Such mineral will be allowed to be sold in the open market with the previous
approval of the State Government. Integrated Steel plant may not find use of a Major
Mineral which may be discovered subsequently.
What shall be the amount to be paid by successful bidder against Stamp Duty? As this
needs to be considered by the bidder for his cost calculation.
Further, the lease period will be for 50 years but mine may be exhausted prior to that
and in such case calculation of the stamp duty will be different.
10.2 C furnishing the Performance Security pursuant to the Auction Rules, valid for
the period specified in the MDPA, for an amount equal to INR [amount in figures]
(Rupees [amount in words]). Pursuant to sub-rule (1) of rule 12 of the Auction Rules,
Draft Response
Area limit as per Section 6
(1) of MMDR Act,1957 will
be applicable.
Decision will be taken by
the Government at the
time of inclusion of the
newly discovered major
mineral in the mining
lease.
The Stamp duty to be
levied will be estimated as
per the applicable law.
The Performance Security
should remain valid for 5
Page | 17
S. No.
Reference to
Query
the Performance Security shall be adjusted every five years so that it continues to
correspond to 0.50% of the reassessed value of estimated resources determined in
accordance with the Auction Rules. In such case, bank guarantee constituting the
Performance Security shall be substituted with another bank guarantee of the same
value
issued
in
accordance
with
this
Clause 10.2, which is for the revised amount or if the Performance Security has been
provided through a security deposit, additional amount towards security deposit shall
be
provided;
The Performance Security BG is supposed to be valid until the expiry of the period for
which Mining Lease has been granted. It is suggested that the validity of Performance
BG can be one year and shall be renewed annually.
41 Clause 10 of Applicable Stamp duty to be paid for registration of Mining Lease Deed
Model Tender
Document
42 Clause 10 of Subsequent to execution of the MDPA, the Successful Bidder shall pay third
Model Tender instalment of the Upfront Payment which is INR [amount in figures] (Rupees [amount
Document
in words]). Subject to such payment the State Government shall grant a mining lease
to the Successful Bidder within a period of 30 days from the date of payment. The date
of the commencement of the period for which a mining lease is granted shall be the
date on which a duly executed mining lease deed is registered.
How will the Stamp Duty for execution of mining lease be calculated?
Will stamp duty calculation be based on valuation of the mineral block i.e., Value of
the Estimated Resource, Rs.18,524.92 Crores or will it be calculated as per 35 (a) (vi) of
Sch I-A of The Indian Stamp(Orissa Amendment) Act,1983 based on the average
annual rent reserved (sum of Royalty, Amt. payable to State Govt. as % of mineral
despatched, DMF and NMET payable on maximum annual production in mining
plan)
Stamp duty charges are a significant onetime expense, the correct calculation of which
has significant impact on the net worth of a mineral block. Based on these figures
bidding will be made. Any revision in the future will have a bearing on the net worth
Draft Response
years
and
renewable
thereafter. Pursuant to
sub-rule (1) of rule 12 of
the Auction Rules, the
Performance Security shall
be adjusted every five
years so that it continues
to correspond to 0.50% of
the reassessed value of
estimated
resources
determined in accordance
with the Auction Rules.
The Stamp duty to be
levied will be estimated as
per the applicable law.
The Stamp duty to be
levied will be estimated as
per the applicable law.
Page | 18
S. No.
Reference to
43 Clause 11 of
Model Tender
Document
Query
of the mineral block.
Timetable S.No.16- Issuance of letter of intent by State Government –Monday, 28
March, 2016
Has the State Government factored in the time required to obtain relaxation under
Section 6? It is suggested that the date under sl.no. 16 be suitably modified as 28th
March, 2016 or 10 days after prior approval from Central Government is obtained.
Prior approval from the Central Government cannot be obtained within 10 days.
Format of MDPA To be executed on stamp paper of adequate value
How much is the “adequate value” of the stamp paper for execution of the MDPA?
44 Schedule IV
of
Model
Tender
Document
45 Schedule IV
of
Model Format of MDPA Clause 10 Mining Plan And Compliance with Applicable Law
Tender
Whether revision in mining plans (upward as well as downward revision in mining
Document
capacity) is allowed in future? Considering the future requirements, such flexibility to
be provided to the successful Bidder. This shall be based on market demand during
different times.
46 Model Tender Will borehole cores of all boreholes be handed over to the successful bidder? IBM
Document
sometimes wishes to check the borehole cores during MCDR inspection.
Draft Response
Area limit as per Section 6
(1) of MMDR Act, 1957
will be applicable.
As per the applicable law.
The provisions of mining
plan as specified under the
Act and the rules made
thereunder shall be
adhered to.
Borehole cores are
required to be preserved
by the GSI.
Page | 19
S. No. Reference to
47 Geological Report
Query
Response
Geological Report Section C.7.1.4. Detailed Mapping
In geological plan in Plate-3,
i).No surface plan has been given in the report.
the line of geological sections
ii). In Geological plan in plate -3 the line of geological section are not is not drawn through the map.
drawn or shown.
These are only marked in the
border.
48 Geological Report
Plate 3: Geological Report It is observed from the geological map that the The lease area cannot be
orebody with considerable thickness continues upto the lease boundary redrawn. Safety zone as per
and beyond in most of the places. Significant quantity of Ore in such statutory obligation has to be
cases will get locked up in the safety zone or 7.5 mtrs. corridor which followed.
mandatorily needs to be left. Whilst the geological resources may be 99.59
million tons as furnished in the GR, the mineable reserves of the deposit
get reduced to the extent of orebody locked up along boundaries. It is
hence suggested to increase the lease area of the block to accommodate
mine working area requirements for maximum extraction of ore. For
scientific mining and from a mineral conservation point of view the lease
area may be so designed that the pitshell allows maximum recovery of
mineral. The lease area may be redrawn to allow maximum recovery of
mineral.
49 Clause 4 of Tender The Mineral Block
There is no overlap of M/s.
Document for Auction IBM has published a Mineral Leasehold map of Odisha. In this map a National Enterprise and the
of Iron Ore Block
certain block 22 is shown having been allotted to M/s National auction block. The resource
Enterprises. The area of Ghoraburhani-Sagasahi when superimposed on has been calculated as per
this map, shows the area allotted to M/s National Enterprises as map provided by DGPS
overlapping with that of Ghoraburhani-Sagasahi along the Western Survey carried out by ORSAC.
boundary. Is 139.165Ha earmarked for Ghoraburhani Sagasahi a It is understood that boundary
freehold?
of N.E. has been taken into
Has the State Government taken care of this point while delineating the consideration while carrying
block? Area published by IBM overlaps with the area reserved for out DGPS survey by ORSAC.
Ghoraburhani Sagasahi Block.
Page | 20
S. No. Reference to
50 Geological Report
Query
Plate 3 – Geological Report 31 boreholes marked in Plate-3 against
detailed summarised litholog of 28 boreholes provided in Annexure I.
While there are 31 boreholes shown in Plate-3 (Detailed Geological Map),
Summarized Borehole Lithologs have been provided in respect of only
28 mineral bearing boreholes. Lithologs, Borehole Collar Coordinates,
Chemical analysis results of core samples in respect of BH SGS-17, SGS18, SGS-19 have not been provided. These 3 boreholes do not appear in
any of the sections provided. Request you to please provide details of
these three boreholes. Borehole details are required for preparing a
geological model of the orebody to arrive mine physicals.
51 Geological Report
Plate 3 – Geological Report Chemical analyses of ore drawn from trenches
and pits have been provided in Ann.II, but, the location of the same is
missing in plate-3. While chemical analysis of samples drawn from 9
trenches in the block has been provided, they have not been marked in
the detailed geological map. The legend of this map shows an entry for
trenches but these have not been marked on the map. Request you to
please incorporate the location of these trenches in the map. Location of
pits and trenches important to understand sub surface geology.
52 Mineral Block Summary Summary of Mineral Block Part A – Cl 4.
Quantity of Minerals
Total Geological Resources Whether the total 84.92 million tonnes of
resource at 55% cut off and 14.67 million tonnes at 45 to 55% cut off is
excluding the reserve buried beneath the road, water stream & electric
line? A village road, 11 kv electric line & a stream passes through the
block. Total indicated resource of 99.59 million tonne shall get reduced
considerably if reserve beneath them has been included in this figure.
Response
It is true that there are 31
boreholes located in the map.
Out of these, three boreholes
SGS~17, SGS-18 and SGS-19
are
non-mineralized
and
located in the area marked for
ancillary activity. Hence, there
is no need to provide the
details
of
these
three
boreholes.
In Plate-3 location of one
trench is shown. The other
trenches do not lie within the
map provided. The analytical
data of other trenches will be
deleted as it does not belong
to the auction block.
53 Geological Report
It is true that there are 31
boreholes located in the map.
Out of these, three boreholes
SGS~17, SGS-18 and SGS-19
Annex_1&II of GR Summarised Litholog of bore hole BH SGS-17, SGS-18
&SGS-19 are plotted inside the block area but lithology and assay data for
these holes have not been shared. The data may be provided. Missing
data are a hindrance to assessment/ verification of the block resource.
Resource is for the whole
block comprising 90.629 ha. of
mineralised area. The resource
buried below road, power line
etc. has to be taken into
account by the Bidders.
Page | 21
S. No. Reference to
Query
Response
are
non-mineralized
and
located in the area marked for
ancillary activity. Hence, there
is no need to provide the
details
of
these
three
boreholes.
54 Geological Report
Annex_1&II_summarized litholog of all boreholes.doc; Plate-3 age 19; The Coordinates of 5GB-18 is
Bore hole No. SGB-18; Lat: 21° 56' 30.542" N; Long: 85° 17' 22.293" E The 21°56'53.524", 85°17' 46.727"
location co-ordinates of SGB-18 given in the lithology log appear to be
wrong, considering its location shown on the geological map. Requesting
to provide correct coordinates. Correct locations of the boreholes are
required to understand the extension of the ore zone correctly.
55 Land Details
Area Statistics of Revenue: Plots In case of some plots, the area with in the The area has been estimated as
block of a particular block is more than the ROR area which is not per the DGPS survey map.
possible. Need to be re-checked and clarified. This is resulting in
confusion and may result in complications in future.
56 Clause 4 of Tender 4.1. The following information regarding the Mineral Block is included in
Document for Auction a separate “Information Memorandum” attached along with this Tender
of Iron Ore Block
Document as Schedule V:
(i) precise map of the Mineral Block identified including geographical coordinates, revenue survey particulars, demarcated using total station and
differential global positioning system and divided into forest land, land
owned by the State Government and land not owned by the State
Government;
• In this block non-mineralised area is 48.536. Has this area been arrived More than 50% of area is
at scientifically, considering the stripping ratio and the infrastructure marked for ancillary activity
requirement covered in the definition of “Mines” under the Mines which is sufficient to carry out
Act,1952?
the mining activity.
Most of the mining leases granted are not able to recover maximum
geological resources from the leases because of inadequate area for
dumping OB, mine tailings etc.,
Page | 22
S. No. Reference to
Query
Response
Rule 5(3) of the Mineral (Auction ) Rules, 2015 requires the area of mining
lease to include area for all activities under the definition of Mine as per
Mines Act,1952
Rule 5. Prerequisites for auction of Mining Lease.(3) The extent of area so demarcated shall include area required for all the
activities falling under the definition of ‘mine’ as defined in clause (j) of
sub-section (1) of section 2 of the Mines Act 1952 (35 of 1952).
Page | 23