Auction of Mineral Blocks in Odisha...2020 and lease under auction will be expiring on 31.03.2020, thus time lag of 3 months. In such a case, what kind of preparatory works can be

Odisha Mineral Blocks Auction (Phase -VII) – Responses to Queries

November 11, 2019 Page 1 of 190

Auction of Mineral Blocks in Odisha

Responses to Queries

on Tender Documents

(Notice Inviting Tender dated October 04, 2019)

Phase –VII

Directorate of Mines Government of Odisha

November 11, 2019



S. No.

Document Clause No. and

Existing Provision Clarification Required Suggested Text for

Amendment, if any Rationale for Clarification

or Amendment Response

1. Tender Document

Clause 11 Time table: Issuance of Letter of Intent by State Govt is Jan 03, 2020.

Last date for issuing LOI is 3rd Jan 2020 and lease under auction will be expiring on 31.03.2020, thus time lag of 3 months. In such a case, what kind of preparatory works can be undertaken by preferred bidder between the date of LOI and expiry of Mining Lease.

To have access to mines for Mining plan preparation, survey etc., by the preferred bidder.

As per provisions of the applicable law prevalent at that time

2. Tender Document

Clause 3.5 The Bidders are expected to conduct due diligence regarding the land to be comprised in the mining lease and also familiarize 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 Panchayats (Extension to the Scheduled Areas) Act, 1996, the Orissa Scheduled Areas Transfer of Immovable

The tender Document is silent about the treatment of Mine Infrastructure. It is to be clarified that how the existing Mine Infrastructure is transferred to preferred Bidder and how to assess the cost of acquiring the Mine Infrastructure and the manner and timeframe of payment.

For assessing the mine infrastructure cost and it’s suitability to build into mine valuation model.

Any financial transaction between the bidder and the present lessee will be the responsibility of the Preferred/ Successful Bidder.



S. No.





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. At the request and cost of the Successful Bidder, the State Government may, in its sole discretion, provide assistance regarding acquisition of land comprised in the mining lease.

3. General Statutory Clearances like Environmental Clearance (EC) and Forest Clearance (FC) etc.,

Will the existing EC and FC be extended for the Successful Bidder to facilitate continuance of the Mining Operations till such time these approvals are obtained in the name of the Successful Bidder?

To facilitate successful bidder to continue mining operations till the clearances are obtained in the name of Successful bidder.

Obtaining necessary approvals under relevant laws are the responsibility of Preferred Bidder/ Successful Bidder.

4. Mineral Block Summary published along with NIT issued

Part B (Particulars of Statutory License, permits, permissions, concessions, approvals and consents related to mining operations)

In the Details/Status Column against each Statutory clearance, it was mentioned that, “To be obtained by the Successful bidder/not applicable/if available, State to provide details”

To estimate timelines involved.




S. No.





on 04.10.2019

It is not clear whether all these statutory clearances are to be obtained afresh by preferred bidder.

5. General Essential services within the mine post expiry of lease on 31.03.2020.

Since the existing lessees lease period expiring on 31.03.2020 and preferred bidder may not execute mining lease by that time after issuance of LOI in Jan’20, it is to be clarified the responsibility lies with whom for undertaking any essential activities. This is to ensure that the status of mine physicals (dumps, slopes, water logging etc.,) remains the same as on 31.03.2020.

For the sake of clarity and to understand the responsibility scope.

It is the responsibility of Preferred Bidder/Successful Bidder.

6. General Closing stock lying at mine head

As per Rule 12(gg) of MCR,2016, the prior lessee may be given 6 months to remove ore excavated during the currency of the lease. If the prior lessee is not able to remove within 6 months, it is to be clarified on the status of inventory.

For the sake of clarity and also how the prior lessee enters the mine to evacuate ore/mineral within 6 months post expiry of lease.

As per provisions of the applicable law prevalent at that time.

7. Tender Document

Annexure II: Bid security, Para 1 “…TenderDocument for the …. Block (“Mineral Block”) dated October 04, 2019 ( “Tender Document”), we [Name of the Bank] having our registered office at

Under Annexure II Para 1, the requirement for bank branch in Odisha should be eliminated

The bidder issues BG from a scheduled bank, which is a branch of a foreign bank based out of Delhi. The bank does not have a branch in Bhubaneshwar.

As per Tender Document



S. No.





[address of the registered office] and one of its branches located at Bhubaneswar, Odisha [name and address of the branch]…..”

8. Tender Document

NA There is currently no provision of fixed infrastructure or ore lying in the lease area. The Government of Odisha may please clarify: 1) Whether it will be ensured that the existing associated infrastructure [such as road, railway sliding, power line, water utilities, other fixed infrastructure] are transferred/ made available for use to the Preferred Bidder by the existing lessee/ any other owner entity? What would be the mechanism, cost and timeframe for such transfer/ right to use? a. If payment has to be made, how will be the value of mine infrastructure be determined b. Details of items to be considered for the infrastructure value calculation

The State Govt. of Odisha shall determine any such payments on account of fixed infrastructure or land or ore lying within the lease area at the expiry of the current lease beforehand and provide the same in the Tender Document to avoid any disputes or litigations at a later stage

It is extremely critical for the bidder to know all the payments and obligations to work out the decision for a mine under auctions and estimate its initial/ final price offer. As a precedent in Coal Auctions, the value of such fixed infrastructure was predetermined and mentioned in the Tender Document for the Bidders to arrive its bid price.




S. No.





i. If the government is keeping records of existing stocks, kindly provide details of stocks available (quantity, quality, location) ii. Is the Government going to conduct an audit in order to confirm the numbers? c. In case the current lessee wants to move the infrastructure / ore lying in the lease area, will a time frame be set for the same i. What will happen in the situation where the lessee does not clear the same in the stipulated period? 2) How the ore lying within the lease area would be disposed. If any payments on account of these have to be paid, please specify the timeline and manner of such payment

9. Tender Document

Clause 3.5: The Bidders are expected to conduct due diligence regarding the land to be comprised in the mining lease and also familiarize themselves with all Applicable Laws

(i) As the mine in question is operational, please clarify if there is any pending land acquisition to be carried out for fully developing and utilizing the mineral block? a. In case any land acquisition is pending, is there any policy or law to acquire surface rights?

It is essential to get clarity on these aspects to ascertain the acquisition cost of the mine to determine our initial price offer/ final price offer. It will help bidders to take an informed decision taking

Obtaining necessary approvals under relevant laws and acquisition of land are the responsibility of Preferred Bidder or Successful Bidder.



S. No.





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 Panchayats (Extension to the Scheduled Areas) Act, 1996, 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. At the request and cost of the Successful Bidder, the State Government may, in its sole discretion, provide assistance regarding acquisition of land comprised in the mining

b. If the previous lessee has already acquired the surface rights, how will the Government of Odisha assist the new lessee to acquire the rights? c. If some part of the land belongs to Tribal population for which there is a restriction to acquire surface rights for mining, the issue regarding surface rights needs to be resolved before the auctions (ii) Please confirm that the entire R&R in relation to this particular mining project is completed and there are no payment or other obligations remaining to be complied with in this respect. a. Kindly provide requirements for R&R if any and if any R&R colony has to constructed, kindly provide details of PAFs and guidelines on R&R plot size, drilling unit size, compensation etc. b. In case the R&R process has already been initiated by the previous lessee but execution is pending, who will ensure completion of the process and bear the costs involved therein? (iii) Please clarify who will bear the

into account the risks associated

Please refer to Clause 3.5 of the Tender Document which states as follows: "The Bidders are expected to conduct due diligence regarding the land to be comprised in the mining lease and ............................ At the request and cost of the Successful Bidder, the State Government may, in its sole discretion, provide assistance regarding acquisition of land comprised in the mining lease".



S. No.





lease. cost of mine closure and such other obligations, as illustrated above, in case those are not completed by 31st March 2020 by the existing lessee

10. MDPA Clause 7.1.3: The Monthly Payment is required to be made within 20 calendar days of expiry of each month with respect to Mineral extracted from the Lease Area in such calendar month.

Reference to “Mineral extracted” in Clause 7.1.3 appears to be erroneous and should instead be to “Mineral dispatched”.

Reference to “Mineral extracted” to be substituted with “Mineral dispatched”.

Corrigendum in this regard is issued

11. Tender Document

Explanation (1) to Clause 5(b): In case an applicant is a subsidiary of another company incorporated in India, the net worth of such holding company may also be considered:

If a Bidder uses the credentials of its holding company, are there any specific documents which are required to be furnished, other than the documents relating to its net worth?

In order to arrange for the requisite documents for submission along with the bid.

The bidder needs to submit the Net Worth Certificate of the Holding Company and the Shareholding Pattern of the Bidder and such other documents as may be necessary that other company is the holding company of the bidder certified by the Statutory Auditor

12. Tender Document

NA Please clarify if it is permissible to submit the bid jointly with another bidder or otherwise, as part of a consortium / JV? If so, kindly provide

In order to ascertain possibility of bidding jointly with other entities.

The bidder should meet the eligibility requirement as per provisions of law



S. No.





the requirements in relation thereto

13. Tender Document

Clause 5 (b) under "Eligibility" "The Bidder must meet the terms and conditions regarding eligibility as stipulated in Schedule I of the Auction Rules for e-auction of Mineral Block for grant of mining lease as quoted below… “

1) In case a bidder is planning to submit the technical bid for multiple blocks in the same phase, or across phases, does the bidder need to have the summation of net worth requirement of all blocks it wants to bid for, or only the maximum of the net worth requirement of all blocks it wants to bid for? 2) If it is the former case (summation of net worth requirement of all blocks), and if the bidder’s net worth is lower than the summation of net worth requirement of all the blocks it has submitted a technical bid for, for which blocks will the bidder be technically qualified? a. If the bidder is technically disqualified for one or more blocks based on the above consideration, what will happen to the bid security?

It is extremely important to understand the net-worth criteria for participating in multiple mines in order to prioritize mines and decide bid premium

Assessment of net worth eligibility will be made as per Schedule I of Mineral (Auction) Rules, 2015

14. Tender Document

Clause 5(c) under "Eligibility" "Disallow participation of persons who are holding or may, in the event of becoming highest bidders in the

Govt. of Odisha may please clarify if the mining lease area of 58 sqkm as mentioned in Clause 5 (c) is the area held in Odisha only or Pan-India? In case a bidder wants to participate in multiple mines across phases and is declared as a “Preferred bidder”

It is extremely important to understand the mining lease criteria for participating in multiple mines in order to prioritize mines and decide bid premium

Applicable on a state wise basis. The bidder must remain in compliance to the area limit requirements as per Section 6 of the



S. No.





auction, hold the area in excess of the area limit under section 6 (1) of the MMDR Act. It may however be noted that the area limit would be governed as per the provisions under section 6 (1) of the MMDR Act. The Central Government, in exercise of the powers conferred under the proviso to clause (b) of sub-section (1) of Section 6 of the Act, has conveyed its approval vide order No. 16/16/2018-M.VI dated September 20, 2019, for increasing the area limit of mining lease in respect of Iron Ore and associated minerals to the extent of 58 Sq. Km in the State of Odisha"

for mines in phase 1, will the area of such mines be added for eligibility? In case a bidder is declared as “Successful bidder” for multiple mines and breaches the mining lease area condition, how will the mine allocation take place in such case?

MMDR Act read with clause 5(c) of the Tender Document before issuance of LoI.

15. Tender Document

Clause 8: Bidding Process

Based on the technical bid and Initial Price Offer (IPO) submitted in the first round, suppose 5 bidders are qualified. However, and in second round, no one participates or bids above the floor price (i.e. the highest

It is important to understand the implications here to decide the number of blocks to bid for and the Initial Price Offer to be submitted in Round 1

As per Law



S. No.





IPO). In that case, how will the government decide the preferred bidder for such a block? Will they cancel the auction for that block, or declare the bidder with the highest IPO as preferred bidder?

16. Tender Document

Clause 11: Timetable Once the LOI is issued, can the preferred bidder get their mining plan approved before expiry of the current lease period i.e. 31 March 2020?


17. Tender Document

Clause 8.2 under "Bidding Process" Where, subsequent to grant of a mining lease, one or more new major minerals are discovered, the percentage of value of mineral despatched as quoted by the Successful Bidder under sub-rule (3) of rule (8) of Auction Rules read with the terms hereof shall be applicable for the purpose of payment to the State Government in respect of each such mineral

In case a declared “Major mineral” apart from Iron ore exists in the mine, does the same have to be included in the mining plan and does the bidder need to fulfill the MDPA provisions for this mineral as well? In case a “Major mineral” is discovered post mining lease execution, does the same have to be included in the mining plan and does the bidder need to fulfill the MDPA provisions for this mineral as well?

It is important to understand the treatment of the other minerals given they will impact the overall cost assessment for the mine




S. No.





18. Tender Document

Clause 12.1: Upfront Payment "The Upfront Payment paid by the Successful Bidder shall be adjusted in full at the earliest against the amount payable in accordance with the percentage of Value of Mineral Dispatched quoted as the Final Price Offer on commencement of production of mineral(s) as specified in MDPA."

Please clarify that until the upfront payment is fully adjusted against the payment of percentage of value of mineral, the Successful Bidder will not be required to make any payment. Please specify the methodology to be followed for such adjustment.

In order to assess implications on the financial model for the project

As per Law

19. Tender Document

NA In case a “Preferred bidder” gets acquired during the process (before mining lease execution), can the “Preferred bidder” be changed to the new entity?

As per Law

20. Tender Document

NA Is there a possibility of crushing of lumps into fines? If yes, will the Royalty, DMF, NMET be paid for lumps or fines?



21. Tender Document

Clause 1.1: …The area under this mining lease is currently granted to {name of the existing lease holder} and is due to expire in accordance

(i) The existing lessee would have already obtained the required consents and approvals such as environment clearances and forest clearances, as applicable. - Please clarify whether it will be

Tender Document and MDPA to specify the arrangement for such transfer and usage.

Clarification required in order to assess time and cost impact of securing requisite consents and approvals/ associated infrastructure for the mining




S. No.





with the provisions of Section 8A of the Mines and Minerals (Development and Regulation) Act, 1957. The area under this mining lease will be available for grant to the bidder after such expiry…. Clause 10.3: The State Government and the Successful Bidder shall enter into the MDPA upon the Successful Bidder having obtained all consents, approvals, permits, no-objections and the like as may be required under Applicable Law for commencement of mining operation.

ensured that the existing consents and approvals are transferred by the existing lessee to the Preferred Bidder or otherwise secured in the name of the Preferred Bidder? What will be the time period for such extension? - Also, whether such existing consents and approvals will be extended for the benefit of the Preferred Bidder to facilitate undertaking mining operations and sale of minerals till such time as the aforesaid approvals are transferred to/ obtained in the name of the Preferred Bidder?

operations.

22. Tender Document

9.1. …The “Value of Mineral Despatched” shall be an amount equal to the product of- (i) mineral despatched in a month; and (ii) sale price of the

Please clarify if the prices published by IBM for the State of Odisha are inclusive of royalty and other taxes such as DMF and NMET that are applicable at the mine level given that as per the extant rules royalty is applicable on IBM published prices

It is important given that Final Price Offer is applicable on the IBM prices that will be published from time to time

The applicable payments should be made based on the sale prices published by IBM



S. No.





mineral (grade-wise and State-wise) as published by Indian Bureau of Mines for such month of despatch

(Rule# 39 (3) of Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016) Is the Government planning a change in the IBM pricing methodology or use different pricing for calculation of Royalty, DMF, NMET and Auction premium? If yes, please share details Apart from Royalty, DMF, NMET, is the Government planning to add any other payments? If yes, please specify

23. Tender Document

NA From a Non-captive mine, is there any restriction on selling ore to a related party? Is there any methodology for pricing of such ore that is sold to related parties?


Sale of ore is permissible as per Law. The pricing methodology will be based on applicable laws prevalent at that time.

24. Tender Document

NA Govt. of Odisha may please provide guidance if any change in the Royalty, DMF, NMET % is expected going forward Apart from Royalty, DMF, NMET, is the Government planning to add any other payments? If yes, please specify

As per Law

25. Tender Document

Clause 14: Bid security Govt. of Odisha may please clarify the methodology of calculation for Net worth requirement and Bid security

As prescribed under Mineral (Auction) Rules, 2015.



S. No.





(% , grade and price for lumps and fines considered)

26. Tender Document

Clause 5: Eligibility Can a partnership between an individual and a company participate in the auctions? If yes, will the net worth be considered as on date or for the last financial year. What documents will need to be submitted in this case?

Please refer to Clause 13.1 and Schedule I B (d)(iii) of the Tender Document for details regarding Partnership Firms.

27. Tender Document

Clause 5: Eligibility If a bidder is a JV of two companies, can the JV company use net worth of any of the JV partners?

The bidder should meet the prescribed Net Worth as stipulated in Schedule I of Mineral (Auction) Rules, 2015.

28. Tender Document

Clause 5: Eligibility If the company is insolvent and the resolution plan has been approved and pending adjudication, can the insolvent company participate? (Given post acquisition, net worth of the entity will meet eligibility criteria)


29. Tender Document

Clause 5: Eligibility Can a foreign company participate in the auction through an Indian subsidiary, which meets the net worth criteria? (Given all directors of the subsidiary are Indian nationals)


30. MCR Rule 12, MCR Under Rule 12 of MCR, the previous lessee is allowed to evacuate all infrastructure and stock lying in the mining lease area. In case such

It is the responsibility of Preferred Bidder/Successful Bidder.



S. No.





evacuation disrupts the operations of the current lessee, can the Govt. of Odisha suggest provisions to assist the current lessee

31. Tender Document

Clause 13.1.1 For the Board resolution, is there a specific format in which it has to be furnished?

No specific format has been provided in the Tender Document.

32. Tender Document

NA In case of any unauthorized settlements and cultivations within lease area, what will the process of relocation? Is R&R required to be done? If yes, will the previous lessee bear the cost of R&R?

Please refer to Clause 3.5 of the Tender Document which states as follows: "The Bidders are expected to conduct due diligence regarding the land to be comprised in the mining lease and .............................. At the request and cost of the Successful Bidder, the State Government may, in its sole discretion, provide assistance regarding acquisition of land comprised in the mining lease".

33. Tender Document

NA For the “Site Specific Conservation Plan”, “Wildlife management plan” if

Obtaining necessary approvals under



S. No.





the costs for approvals and other costs involved therein have already paid by the previous lessee, will the Successful bidder need to pay again or not?

relevant laws are the responsibility of Preferred Bidder/ Successful Bidder.

34. Tender Document

Clause 11: Timetable During the period between announcement of Preferred bidder and granting of LOI, can preparatory work be undertaken by the Preferred bidder to start mining operations?


35. Tender Document

NA For the people employed by the previous lessee, will the successful bidder be required be required to give employment to them on existing terms and conditions?

Engagement of employees is the responsibility of the lessee at the relevant time

36. Tender Document

Clause 10.3: Execution of MDPA: The State Government and the Successful Bidder shall enter into the MDPA upon the Successful Bidder having obtained all consents, approvals, permits, no-objections and the like as may be required under Applicable Law for commencement of mining operation.

MDPA shall be signed between Successful Bidder and State Government only after the Preferred Bidder obtains all the clearances. Please clarify that the Letter of Intent (LOI) would be sufficient documentary evidence for submitting applications and obtaining clearances from authorities.

Clarification required as clearances/ approvals are required to be obtained within limited time frame.

Please refer to Rule 10 of Mineral (Auction) Rules, 2015.



S. No.





Clause 11 (Timetable): 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 by T2 + 4 months.

37. Tender Document

Clause 14.3: Save and except as provided in this Tender Document, the Bid Security of unsuccessful Bidders will be returned by the State Government, without any interest, as promptly as possible on issuance of Letter of Intent to the Preferred Bidder.

Please clarify the specific timeline for returning the Bid Security to unsuccessful Bidders as well as in case of annulment of the tender process.

“Save and except as provided in this Tender Document, the Bid Security of unsuccessful Bidders will be returned by the State Government, without any interest, as promptly as possible on issuance of Letter of Intent to the Preferred Bidder, and in any event

In order to have a definitive timeline for return of bid security in case the Bidder is not the Preferred Bidder or the tender process is annulled.




S. No.





within [10] days from the date of issuance of the Letter of Intent. In case of annulment of the tender process, save and except as provided in the Tender Document, the Bid Security of the Bidders shall be returned by the State Government, without any interest, as promptly as possible and in any event within [10] days from the annulment of the tender process.”

38. Format of Power of Attorney

Clause 13.1.1 (c) and Schedule I, para A (c): In case of Bidder being a company or a partnership firm, a power of attorney in the format specified in Annexure III of Schedule I (Format of power of attorney) authorising the signatory of the bid

Clause 13.1.1 (c) and para A (c) of Schedule I provide that the Power of Attorney needs to authorize the signatory of the bid to inter alia use the digital signature on behalf of the Bidder. However, the Format of Power of Attorney provided in Schedule I (Annexure I) does not specifically mention an authorization for usage of digital signature on behalf of the Bidder. Please clarify if a

To have clarity on compliance with Clause 13.1.1 (c) and para A (c) of Schedule I vis-à-vis format of the Power of Attorney.




S. No.





to participate in the tender process and do all acts pursuant thereto on behalf of the Bidder, including usage of the digital signature on behalf of the Bidder. In case of Bidder being an individual or sole proprietorship, power of attorney would not be required if such individual /sole proprietor personally signs; Schedule-I (Annexure-III)

modification is required to be made to the Format to specifically include a reference to ‘including usage of the digital signature on behalf of the Bidder’.

39. MDPA Clause 1.2.1 (ii): Any reference to any statute or statutory provision shall include: …… (ii) such provision as from time to time amended, modified, re-enacted or consolidated (whether before or after the date of this Agreement) to the extent such

The import of this provision is not entirely clear; in particular, references to “transactions entered into under this Agreement prior to the Agreement Date” and “include any past statutory provision .. which the provision referred to has directly or indirectly replaced”. The clause may be captured as follows: “such provision as from time to time amended, modified, re-enacted or consolidated”

Clause 1.2.1 (ii): “such provision as from time to time amended, modified, re-enacted or consolidated.”

In order to have a clear understanding of the interpretation clause.




S. No.





amendment, modification, re-enactment or consolidation applies or is capable of applying to any transactions entered into under this Agreement prior to the Agreement Date and (to the extent liability thereunder may exist or can arise) shall include any past statutory provision (as from time to time amended, modified, re-enacted or consolidated) which the provision referred to has directly or indirectly replaced.

40. MDPA 8. Minimum Production Requirement

For calculation of minimum production requirement, how will lumps and fines ratio be treated for calculation?

Minimum production requirement is a critical clause, and it is important to understand how would lumps and fines ratio be considered by the State Government while working this out

Minimum production requirement is based on the mine plan approved by IBM

41. Tender Document

Clause 5: Eligibility Can two companies which are affiliated to each other or with

If multiple bids are submitted by different

The bidder should meet the eligibility



S. No.





common shareholding participate in the same mine independently?

entities of the same company and these are treated as different bids, then this will reduce the competition in the top 50% of the entities that are shortlisted for the e-auction/ final price offer round.

requirement as per provisions of law

42. Tender Document

NA 1) Please clarify the amount of Stamp Duty applicable on the Mining Lease and MDPA. 2) Further also clarify if stamp duty shall be applicable on the transfer of fixed infrastructure also from the previous lessee

Illustration for working out the stamp duty

Provisions of stamp duty vary from state to state, accordingly exact calculation on stamp duty is required for the purpose of working out the total cost of acquisition of the mine

The stamp duty on the Mining Lease Deed and others shall be payable in accordance with the provisions of the Indian Stamp Act, 1899 as applicable to the state of Odisha.

43. Tender Document

Clauses 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: …. Clause 4.2: Bidders are strongly encouraged to review the Information

Please provide copy of the Information Memorandum.

Please refer to Geological Reports that form part of the Block Specific Tender Document



S. No.





Memorandum.

44. MDPA Clause 4.2.2: (Clause 4.2. Events for appropriation of the Performance Security) Provided however that in the event an Appropriation Event has occurred solely on account of an Event of Force Majeure which could not have been mitigated by the Successful Bidder through Good Industry Practice as provided in Clause 17, then the Performance Security shall not be appropriated for such specific Appropriation Event.

The clause does not provide for an exception for a situation where the Appropriation Event is on account of a default of the State Government, in which case the Performance Security should not be appropriated. Suitable modification suggested alongside.

Provided however that in the event an Appropriation Event has occurred (i) solely on account of an Event of Force Majeure which could not have been mitigated by the Successful Bidder through Good Industry Practice as provided in Clause 17, or (ii) on account of a default of the State Government, then the Performance Security shall not be appropriated for such specific Appropriation Event.

In case an Appropriation Event occurs on account of State Government’s default, the Successful Bidder should not be liable to pay damages.


45. MDPA Clause 4.3.1 S. No. (7): Appropriation Event: Any other breach or non-compliance with any of the provisions of this Agreement, including in case of the Warranties being untrue

The sub-clause leaves it open to the Government to decide at its discretion the amounts to be appropriated in case of ‘Any other breach or non-compliance’. This makes the provision open-ended and vague. Suitable modification should be made.

Instead of an open-ended provision, the clause should be modified so as to identify additional specific events (if any) where the Government may

In order to avoid ambiguity as to the amounts to be appropriated from the performance security.




S. No.





or misleading or incorrect in any manner whatsoever. Amount of the Performance Security to be appropriated: Such proportion as may be determined by the State Government in its sole discretion.

appropriate performance security and specify corresponding amounts to be appropriated or a formula therefor.

46. MDPA Clause 4.3.3: Any one or more Appropriation Events resulting in appropriation of the entire Performance Security shall give the State Government a right to terminate the mining lease, without prejudice to any other proceeding to be taken against the mining lease holder.

The Successful Bidder should be provided a cure period to remedy the relevant default even in a case where the entire Performance Security is appropriated since certain defaults where the entire amount is appropriated may still be remediable.

Provide for a cure period for the Successful Bidder to remedy its default after appropriation of the Performance Security.

The Successful Bidder should have an opportunity to remedy its default after appropriation of the Performance Security.


47. MDPA Clause 12.4: Subject to the Successful Bidder providing security to the Indemnified Party, to the Indemnified Party's sole and absolute

Clause 12.5 stipulates a fixed timeline of 30 days for payment towards a Claim. This timeline should not apply to cases wherein the Successful Bidder decides to take action to avoid, dispute, compromise or defend a Claim raised by a third party

Clause 12.5 should be suitably redrafted to be made subject to provisions of Clause 12.4.

In order to have consistency between the terms of Clause 12.4 and Clause 12.5.




S. No.





satisfaction against any claim, liability, costs, expenses, damages or losses which may be incurred, the Successful Bidder may take such action as it may reasonably deem fit to avoid, dispute, compromise or defend the Claim. Clause 12.5: Payments of the amount of Claim shall become due and payable within [thirty] days of receipt of notice of Claim. If a payment due from the Successful Bidder under this clause is subject to Tax (whether by way of direct assessment or withholding at its source), the Indemnified Party shall be entitled to receive from the Successful Bidder such amounts as shall ensure that the net receipt, after Tax, to the

pursuant to Clause 12.4.



S. No.





Indemnified Party in respect of the payment is the same as it would have been were the payment not subject to Tax.

48. MDPA Clauses 13.2: Assignment conditions Assignment of this Agreement under Clause 13.3 shall be subject to the following conditions precedent: (a) the proposed assignee must meet the applicable Eligibility Conditions; (b) the proposed assignee must agree to unconditionally and irrevocably adhere to the provisions of the Act and Rules made thereunder and this Agreement and must enter into a deed of adherence/ assignment agreement in such form as may be satisfactory to the State

Please clarify if the reference to “Assignment of this Agreement under Clause 13.3” is instead meant to be to “Assignment of this Agreement under Clause 13.1”.

To ascertain the correct clause referred to in Clause 13.2.

Corrigendum in this regard is issued



S. No.





Government; (c) the proposed assignee must have furnished the Performance Security, to substitute any subsisting Performance Security provided by the Successful Bidder; and (d) the proposed assignee must have paid any other amount due from the Successful Bidder and agree to indemnify and hold the State Government harmless in all respects against any claims from any Third Party or the Successful Bidder with respect to such assignment.

49. MDPA Clauses 16.2: The Central Government or the State Government, through its authorized representatives, shall have access to the Successful Bidder’s financial and other

The right to procure copies of the Successful Bidder’s financial and other records and transactions should be restricted with respect to a specific time period and the Successful Bidder should be required to retain records only for such time period.

The Central Government or the State Government, through its authorized representatives, shall have access to the Successful Bidder’s financial and other

As per Law



S. No.





records and transactions (relatable to any period) at any time upon reasonable advance notice, the right to copy therefrom, for the purpose of assessing the performance and compliance of the Successful Bidder with the terms of this Agreement and Applicable Law, rules and regulations or to aid in the enforcement of the same.

records and transactions (relatable to a period of immediately preceding [5] years any period) at any time upon reasonable advance notice, the right to copy therefrom, for the purpose of assessing the performance and compliance of the Successful Bidder with the terms of this Agreement and Applicable Law, rules and regulations or to aid in the enforcement of the same.

50. MDPA Clause 17.1: Event of Force Majeure means any of the following events or circumstances or combination of the following events or circumstances which are beyond the reasonable control of the Successful

The clause should be amended to also include the following events: (i) Unlawful or unauthorized or without jurisdiction revocation of, or refusal to renew or

In order to cover additional relevant events as Force Majeure Events.




S. No.





Bidder, which could not have been prevented by Good Industry Practice or by the exercise of reasonable skill and care and which or any consequences of which, have a material and adverse effect upon the performance by the Successful Bidder of its obligations or enjoyment of its rights:

grant without valid cause, any clearance, license, permit, authorization, no objection certificate, consent, approval or exemption required by the Successful Bidder or any of its contractors to perform their obligations under this Agreement; (ii) Any event or circumstance of a nature analogous to any of the foregoing.

51. MDPA Clause 19.3.1: If any term, provision, covenant or restriction of this Agreement or the application thereof to any Person or circumstance shall be held invalid, void or unenforceable by a court of competent jurisdiction or other Governmental Authority to any extent, the

Reference to an entity holding a term, covenant etc. of the Agreement invalid, void or enforceable should be restricted to a court of competent jurisdiction and reference to Governmental Authority should be deleted.

The phrase ‘or other Governmental Authority’ should be deleted.




S. No.





remainder of the terms, provisions, covenants and restrictions of this Agreement and the application thereof to Persons or circumstances (other than those as to which any portion of this Agreement is held invalid, void or unenforceable) shall not be affected thereby and shall remain in full force and effect to the fullest extent permitted by law, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party.

52. MDPA Clause 19.6: All rights and remedies of the State Government hereto shall be in addition to all other legal rights and remedies belonging to the State Government

The benefit of this clause should also extend to the Successful Bidder.

The words “State Government” to be substituted with “Parties”.

To ensure even Successful Bidder’s accrued and other rights are protected.




S. No.





and the same shall be deemed to be cumulative and not alternative to such legal rights and remedies aforesaid and it is hereby expressly agreed and declared by and between the Parties hereto, that the determination of this Agreement for any cause whatsoever shall be without prejudice to any and all rights and claims of the State Government, which shall or may have accrued prior thereto.

53. MDPA Clause 2.4(b) of Schedule E (Warranties): The execution and delivery of this Agreement by the Successful Bidder and the performance of the obligations under it do not and shall not: ……… (b) require on the part of the Successful Bidder,

The performance of the obligations under the MDPA including undertaking mining operations will require the Successful Bidder to make filings with, or seek consents or approvals from, the relevant Governmental Authority from time to time. Further, the MDPA/ mining lease and the Agreement will need to be stamped and registered for which necessary filings would need to be made. Accordingly. Clause 2.4 (b) of

Clause 2.4(b) of Schedule E to be deleted.

The representation sought in Clause 2.4 (b), Schedule E may not hold true.




S. No.





any filing with, or permission, authorisation, consent or approval of, any Governmental Authority; ..

Schedule E to be deleted.

54. MDPA NA The State Government should facilitate and provide requisite assistance to the Successful Bidder to carry out the mining operations and perform its obligations under the MDPA.

Insert the following clause: The State Government agrees to provide support to the Successful Bidder and undertakes to observe, comply with and perform, in accordance with the provisions of this Agreement and the Applicable Laws, the following: (a) provide support and assistance to the Successful Bidder in procuring applicable permits required from any Government Authority for implementation and operation of the

The Successful Bidder is required to carry out the mining operations and perform its obligations under the MDPA.



S. No.





Mineral Block; (b) provide assistance to the Successful Bidder in obtaining access to all necessary infrastructure facilities and utilities for undertaking mining operations at the Lease Area; (c)support, cooperate with and facilitate the Successful Bidder in the implementation and operation of the mining operations in accordance with the provisions of this Agreement; (d) provide reasonable assistance to the Successful Bidder and any expatriate personnel of the Successful Bidder or its contractors to obtain applicable visas and work



S. No.





permits for the purposes of discharge by the Successful Bidder or its contractors their obligations under this Agreement.

55. MDPA; Tender Document

Please incorporate suitable provision granting the Successful Bidder a right to terminate the MDPA and the mining lease and surrender the mines, without liability to make any payments, in case of exhaustion of minerals prior to completion of term of the mining lease.

Suitable clause to be incorporated.


56. MDPA Clause 1.1.8: “Control” shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting

The term “Control” has been defined in the draft MDPA but not used in the document. The definition may be deleted.

The definition of “Control” in Clause 1.1.8 may be deleted.

As per Tender Document.



S. No.





agreements or in any other manner.

57. MDPA; Tender Document

Clause 1.1.3 of the MDPA: “Applicable Law” shall mean all applicable statutes, laws, by-laws, rules, regulations, orders, ordinances, protocols, codes, guidelines, notices, directions, judgments, decrees or other requirements or official directive of any governmental authority or court or other law, rule or regulation approval from the relevant governmental authority, government resolution, directive, or other government restriction or any similar form of decision of, or determination by, or any interpretation or adjudication having the force of law in India at the relevant point in time.

References to terms such as ‘protocols’, ‘other requirements’ and ‘other restrictions’ render the definition of ‘Applicable Laws’ too broad and ambiguous. Changes suggested alongside in order to include only such rules, regulations etc. as having the force of law within the definition of Applicable Laws.

“Applicable Law” shall mean all applicable statutes, laws, by-laws, rules, regulations, orders, ordinances, protocols, codes, guidelines, notices, directions, judgments, decrees, or other requirements or official directive of any governmental authority or court, or other law, rule or regulation approval from the relevant governmental authority, government resolution, directive, or other government restriction or any similar form of decision of, or determination by, or any interpretation or adjudication, each

To seek clarity on the ambit of the term ‘Applicable Laws’ as used in the MDPA.




S. No.





Clause 2.3 of the Tender Document also has the same definition.

having the force of law in India at the relevant point in time.

58. Tender Document

NA The existing lessee does not have any captive power substation and depends on Hema Ispat power sub-station which is the sister concern of existing lessee. Will the new lessee be able to use the current infrastructure at the same terms and conditions?


59. Tender Document, MDPA

Introduction to the Tender Document: Clause 3.6: Pursuant to sub-rule (3) and sub-rule (4) of Rule 6 of the Auction Rules, the State Government reserves this Mineral Block for Specified End Use. The minerals extracted under the mining lease shall: i. be utilised solely for the Specified End Use; ii. ……..

Please clarify if the minerals extracted under the mining lease may be utilized for: (i) In addition to the original Specified End-Use Plant, any specified end-use plant subsequently developed or acquired by the Bidder? (ii) In substitution of the original Specified End-Use Plant, any specified end-use plant subsequently developed or acquired by the Bidder? (iii) Specified end-use plants owned by the holding company, a subsidiary or a group company of the Bidder?

In order to confirm if there is flexibility for the Bidder to use the mineral extracted in other plants owned by the Bidder or its group companies.

As per Mineral (Auction) Rules, 2015.



S. No.





Clause 5(d) of the Tender Document: The Mineral Block has been reserved for Specified End Use pursuant to the proviso to sub-section (6) of Section 10B of the Act read with sub-rule (3) of rule 6 of the Auction Rules. The Bidder having a Specified End Use Plant shall be eligible to participate in the e-auction Clause 6.2 of the MDPA also encapsulates the above.

60. Tender document

Clause 6.2 Under “Utilisation of Mineral” “The Successful Bidder acknowledges that the Lease Area has been reserved for the Specified End Use and the Successful Bidder has qualified for the electronic auction on the basis of its

As per Clause 6.2 under “Utilisation of Mineral”, 25% of total mineral extracted in the previous financial year for which end use was specified can be sold in the current year” 1) Is there any restriction on the grade of ore that can be sold or any grade can be sold? 2) Does the rule apply for all minerals in cumulative (in case there are other




S. No.





representation that all minerals (including 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, either directly or indirectly. Provided that quantity of mineral equivalent to twenty five percent of total mineral excavated in the previous financial year, for which end use was specified can be sold in the current financial year”

major minerals) or is a mineral wise rule?

61. Tender Document

Clause 5: Eligibility In case of a captive mine, if another party buys 51% stake in the “Successful Bidder”, will the party which bought the stake be allowed to use the ore for captive purposes?


62. Tender Document

Clause 5 Resource value not given. Resource value figure should be added.

Resource value is required to understand the net worth figures.

The Value of Estimated Resources (VER) has been calculated as per the Mineral (Auction) Rules, 2015.



S. No.





63. Tender Document

Clause 6. Review Period and Site Visit

In case of successful bidder being different than present lessee, how the Railway siding, and other fixed infrastructure within ML area belonging to present lessee shall be transferred to the new lessee. What is the depreciated value of these fixed assets?

An explanation on depreciated value of railway line and other fixed infrastructure within ML boundary to be indicated for prospective bidders.

This would enable the prospective bidders to make appropriate provision in their costing.


64. Tender Document

Clause 11 - Timeline The MDPA is to be signed after obtaining all clearances. Following clarification is required: • Whether the present EC and FC in favour of present lessee shall be seamlessly transferred in favour of new successful bidder or the successful bidder shall have to obtain fresh EC and FC? • Whether NPV and CA charges are payable afresh? • Whether CA land is to be provided afresh even if the present lessee has mutated CA land in favour of State Forest department? •In case the present lessee is successful in retaining this mine, whether he would be required to obtain fresh EC and FC and pay NPV and CA charges?

Obtaining necessary approvals under relevant laws are the responsibility of Preferred Bidder or Successful Bidder. The cost for the same needs to be borne by the Preferred/ Successful bidder.

65. Eligibility 5 Company (A) has become a subsidiary of another company (B) in October 2019. Can company A bid in

Please refer to Schedule I of Mineral (Auction) Rules, 2015



S. No.





auction if company B matches net worth criteria?

66. Eligibility 5 Captive mines capacity has to be used at specified end use plant as per tender documents. In case the end use plant is expanded or the company acquires further end use plants then can the ore from captive mines be used at this expanded or new units of the company?

Please refer to Mineral (Auction) Rules, 2015.

67. Tender Document

Clause3.6: Pursuant to sub-rule (3) and sub-rule (4) of Rule 6 of the Auction Rules, the State Government reserves this Mineral Block for Specified End Use. The minerals extracted under the mining lease shall: i. be utilized solely for the Specified End Use; and ii. not be sold or transferred or otherwise disposed of, either directly or indirectly. Provided that quantity of mineral equivalent to twenty five per cent of total mineral excavated

In case mineral corresponding to 25% in the previous year could not be sold in the current year due to unforeseen circumstances, can the balance quantity be carried forwarded to future years for selling?

Due to market conditions or other statutory restrictions, it may not be possible to sell or dispose whole quantity of mineral corresponding to 25%.




S. No.





in the previous financial year, for which end use was specified can be sold in the current financial year.

68. Tender Document

Clause 2.19, 20.20 of the tender Document

In terms of the tender document, “specified end use plant” means a plant engaged in the production of sponge iron and/or pig iron and/or steel and/or pellets, owned by the bidder and located in India. 1. Can the ‘specified end use plant’ be a plants owned by subsidiary company, holding company or group company of the bidder?


69. Tender Document

Clause 5(d) In terms of the tender document states that the bidder having a specified end use plant shall be eligible to participate in the e-auction 1. If a proposal for setting up of an end use plant has been made, will that be sufficient for the purposes of a “specified end use plant”?


70. Tender Document Clause 2.20 Schedule IV Format of MDPA, Clause 1.1.28

In terms of the tender document, “specified end use plant” means a plant engaged in the production of sponge iron and/or pig iron and/or steel and/or pellets, owned by the bidder and located in India. However, in terms of the Model

Clause 1.1.28 to be amended to bring in line with the definition under the tender document as under and Deletion of Schedule G: “Specified end use

This will bring the MDPA in line with the terms and conditions of the tender document and facilitate setting up/acquisition of new end use plants by the bidder.




S. No.





MDPA the specified end use plant means a plant engaged in the production of sponge iron and/or pig iron and/or steel and/or pellets, owned by the bidder and located in India and as more particularly described in Schedule G. 1. In the event the successful bidder acquires or sets up a new end use plant, can the ore produced from the auctioned block be use at the new end use plant as captive consumption? 2. Mining leases granted through auctions are freely transferable in terms of the MMDR Act and as specified in the Clause 13 of the Schedule IV Format of MDPA, upon a transfer of the mining lease granted in this auction in accordance with the applicable law, can the ore produced be used towards an end use plant owned by the transferee as captive consumption?

plant” means a plant engaged in the production of sponge iron and/or pig iron and/or steel and/or pellets, owned by the bidder and located in India.

71. Schedule I, B (v) In terms of the tender document, the bidder is required to submit a certificate from the statutory auditor of the bidder certifying the details of the specified end use plant or with self-certified true copy of Consent to operate issued by the relevant state




S. No.





pollution control board. 1. What specific details are to be certified by the statutory auditor? 2. Is the consent to operate last issued by the relevant state pollution control board for the end-use plant sufficient for the purposes of this clause?

72. Clause 13.1.1 13.1.1. (b) In case of Bidder being a company or a partnership firm, a power of attorney in the format specified in Annexure III of Schedule I (Format of power of attorney) authorising the signatory of the bid to participate in the tender process and do all acts pursuant thereto on behalf of the Bidder, including usage of the digital signature on behalf of the Bidder. (e) In case of Bidder being a company or partnership firm, (i) duly certified copy of the corporate authorisation, such as board resolution in case of a company, or (ii) authority letter (signed by all the partners) in case of a partnership firm authorising such company or partnership firm to participate in the

A general Board resolution should be allowed with a mineral block specific power of attorney

Auctions of multiple mineral blocks have been notified simultaneously and this will enable bidder to participate in more business development avenues.

The general Board Resolution may be given with block specific power of attorney.



S. No.





tender process and submit a bid, and authorising the person signing the power of attorney on behalf of such company or partnership firm, provided that such document should pre-date the power of attorney as stated in Clause 13.1.1(c). 1. Please clarify if a general resolution passed by the Board of Directors to enable the company to participate in and bid for mineral block auctions in the state of Orissa meet the requirements or a specific resolution for each mineral block is required?

73. Tender Document

Clause 9: Reserve Price 1. Reserve price for different are different. 2. What is the basis of fixing reserve price as high as 50%. 3. It should be at the level of not more than 10%.

Reserve price for all iron ore blocks is 10%

1. Higher reserve price will reduce the no of participant. 2. In two rounds auction system, very high reserve price for first round has no logic.


74. General Valuation of immovable assets in mine

Almost all the mines put for auction are working mines. Many immovable infrastructures have been created by present lessee? How these asset valuation will be done. Whether the said value will be another payable to government or lessee?

This burden should not be put on bidder.




S. No.





75. General Transfer of EC/FC/Mine plan approval to new bidder

Central Government is actively considering allowing transfer of present EC/FC/Mine Plan Approvals of present lessee to successful bidder. Can we expect an assurance from Government that if such amendment comes then it will be applicable to present bidding blocks also.


76. Tender Document for Auction of Nuagaon Iron Ore Block

5. Eligibility b)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 shall continue to be a subsidiary of such holding company until such time the applicant meets the aforementioned net worth threshold.

For Example: There is a Company “A” in existence and incorporated in India prior to the date of issuance of NIT and has audited balance sheet of financial year 2018-19. Company “B” which is also incorporated in India, holds 100% shares of Company of “A”. Before submission of bid, Company “C” buys 49% shares of Company “A” and thus Company “A” becomes JV Company of Company “B” and Company “C”. The majority shares (51%) of Company “A” is still with Company “B” as on date of submission of Bid. Company “B” has sufficient Net worth as on March 31, 2019 to meet qualifying criteria as required for Nuagaon Iron Ore ML tender.

Please refer to Schedule I of Mineral (Auction) Rules, 2015.



S. No.





(2) 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 financial year ended immediately preceding the date of issuance of notice inviting tender. 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’

Since, Company “A” doesn’t have sufficient Net worth to meet qualifying requirement for Nuagaon Iron Ore ML tender, it draws strength from its holding Company “B”. Please confirm whether as per the Tender conditions, Company “A” is eligible to participate in the tender on the basis of Net worth of Company “B”.


5.Eligibility b)Explanation In case an applicant is a subsidiary of another company incorporated in India, the net worth

Can a successful bidder form a SPV to execute the project. Kindly confirm as per applicable laws.




S. No.





of such holding company may also be considered: Provided that, in such case, the applicant shall continue to be a subsidiary of such holding company until such time the applicant meets the aforementioned net worth threshold.


9. Reserve Price: The Reserve Price is 50% (fifty percent) of Value of Mineral Despatched for the Mineral Block.

The Reserve Price (50%) for Nuagaon mine is very high. This mine has 789 MT resources. To extract Iron ore from such large size mine, a significant Initial Capital investment is required. Further, the upfront amount and Performance Bank Guarantee of Rs 996 Cr each leading to higher financial cost. Bidder has to consider all the above parameter in their cost while quoting premium. As per data available till 4th.Oct’19 on the website of ministry of mines regarding 70 successfully auctioned mines across India, the maximum reserve price was 35%. Keeping above in the view, it is




S. No.





requested that Reserve price for Nuagaon mine should also be kept as 35%.


1. Important information 1.1 All information provided in this Tender Document should be read together with the Act and the rules framed thereunder. In the event of a conflict between this Tender Document and the Act or the rules, the Act or the rules (as amended from time to time), as the case may be, shall prevail. 9.2. It is clarified that payment in accordance with the Final Price Offer shall be required to be paid monthly in addition to the payment of royalty or dead rent, as applicable. Royalty on Iron Ore as

As per tender condition, bidder has to follow MMDR Act and rules framed thereunder. All the miners has to submit monthly and annual return as per MCDR 2017, wherein miners has to provide sale price inclusive of Royalty, DMF, NMET excluding Taxes/GST. IBM is computing average sale price on the basis monthly return. Since Royalty is calculated on IBM published sale price, it seems that Royalty is calculated on Base price + Royalty + DMF+ NMET i.e. cascading effect is there on Royalty + DMF+ NMET resulting higher cash outflow by miners. To mitigate the above, it is requested to please consider Royalty on actual sale price. The same may be consider through additional condition. Precedence can be taken from Madhya Pradesh State government’s Bunder Diamond Project, wherein




S. No.





per MMDR Act: 15% of Average sale price on ad valorem basis. As per MCDR 2017: CHAPTER VI Notices and Returns 45. Monthly and annual returns. (8) In case of mining of minerals by the holder of a mining lease, the– (a) sale value is the gross amount payable by the purchaser as indicated in the sale invoice, where the sale transaction is on an arms’ length basis and the price is the sole consideration for the sale, excluding taxes, if any. Explanation.– For the purpose of computing sale value, no deduction from the gross amount shall be made in respect of royalty, payments to the District Mineral

royalty is to paid on actual sale price and not on IBM sale price.



S. No.





Foundation and payments to the National Mineral Exploration Trust.


19.4. Costs and expenses 19.4.1. The Successful Bidder shall bear its own costs in connection with the execution of this Agreement. 19.4.2. The stamp duty payable for this Agreement shall be borne by the Successful Bidder.

I. As per tender condition, Successful Bidder has to pay stamp duty during execution of MDPA and Mining Lease. We understand that stamp duty shall be paid as per Indian Stamp (Odisha Amendment) Act. However the ongoing litigation regarding stamp duty calculation for mining lease as per Indian Stamp (Odisha Amendment) Act 2013 at Hon’ble High court - Odisha is sub judice. Since Nuagaon mine is under operation and it is expected that mining lease shall be executed in due course of time, please provide following information on stamp duty to estimate the project economics: • How much Stamp duty is to be paid during the execution of MDPA or Mining Lease • Methodology for calculation of Stamp Duty and Registration Fee as per applicable laws.

The stamp duty on the Mining Lease Deed shall be payable in accordance with the provisions of the Indian Stamp Act, 1899 as applicable to the state of Odisha.



S. No.





II. Mining Lease shall be granted for a period of 50 yrs. Since the calculation of stamp duty is dependent on period of mining lease, the grant of Mining lease period less than 50 years should be at the discretion of the successful bidder particularly for the mines whose resources are very limited thus life of mine would be less than 50 years.


10.3. Execution of Mine Development and Production Agreement: The State Government and the Successful Bidder shall enter into the MDPA upon the Successful Bidder having obtained all consents, approvals, permits, no-objections and the like as may be required under Applicable Law for commencement of mining operation.

Mining Lease of Nuagaon and many other iron ore mines are about to expire on 31st March 2020. In order to avoid disruption in supply of Iron ore to Steel Industry, production from all the operating mine should be continuous even after expiry of Mining leases. All the existing clearances will be co-terminus with Mining leases due to which successful bidder has to take afresh approval/clearance. For mining project, grant of fresh Environment and forest clearance takes 2-3 years time resulting delay in start of production from mine.




S. No.





Therefore it is requested that, Successful bidder should be allowed to mine with existing clearance for the mine for atleast 3 years, meanwhile successful bidder will apply and take afresh approvals.


3. Introduction 3.5 The Bidders are expected to conduct due diligence regarding the land to be comprised in the mining lease and also familiarize 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 Panchayats (Extension to the Scheduled Areas) Act, 1996, the Orissa Scheduled Areas Transfer of Immovable Property (By Scheduled Tribes) Regulations, 1956, the Orissa Land

For operating mine, existing allottee has acquired land (private, Government and forest) and created fixed infrastructure. In order to start the mine by 1st April 2020, land and fixed infrastructure set-up by existing allottee needs to be transferred to successful bidder at earliest. Please provide the policy guidelines and extent of assistance from Government of Odisha to transfer the land and fixed infrastructure from existing allottee. The precedence can be taken from Coal block auction in 2015, wherein Ministry of Coal/CMPDI has provided assistance for smooth transaction of assets from existing allottee to new allottee.




S. No.





Reforms Act 1960 and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation & Resettlement Act 2013.


Clause 12 Payments by the Successful Bidder

What are the existing duties and/or levy applicable on sale/production of Iron ore in the state of odisha in addition to Royalty, DMF, NMET and Bid premium as per applicable laws? Please provide relevant applicable laws also.

As per applicable laws


Clause 12.1 Upfront Payment The Upfront Payment paid by the Successful Bidder shall be adjusted in full at the earliest against the amount payable in accordance with the percentage of Value of Mineral Despatched quoted as the Final Price Offer on commencement of production of mineral(s) as specified in MDPA.

Our understanding w.r.t upfront payment is that: until the upfront payment is fully adjusted against the monthly payment of percentage of value of mineral dispatch the successful bidder will not be required to make any payment. Kindly confirm.

As per Law



S. No.






Clause 11 Timetable Issuance of LOA 3rd Jan’2020 (T1) Submission of Performance Security and mining plan along with second installment (10%) of Upfront Payment by the Preferred Bidder to become Successful Bidder T2 (last date of submission is T1 + 2 years and 6 months) 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. T2 + 4 months

What is the time period between issuance of letter of intent by State Govt. and obtaining of all approvals / permissions / clearances e.g. approval of Mining Plan, obtaining of Environment Clearance, Obtaining of Forest Clearance, Wild life Clearance, Consent to Establish, Consent to operate, permission for mine opening etc. as given in Summary of the Mineral Block Specific time period to be given for obtaining of all permissions / approvals / clearance etc. Time period to be declared for obtaining of all permissions / clearances / approvals etc. required under different statutes for opening of mine.




S. No.






Clause 11 Timeline Conduct of ascending forward electronic auction and submission of Final Price Offer on the electronic auction platform : Wednesday, December 11, 2019 to Wednesday, December 18, 2019

Is there any possibility of simultaneous e-forward auction of the two blocks as multiple tender for Iron/Manganese ore have been issued by state government of Odisha. Participation with single registration/ DSC in both the blocks wouldn’t be possible.

Simultaneous e-forward auction will be scheduled taking into consideration the said matter

87. MDPA Schedule D: Minimum Production Requirement

Minimum production is linked to % of production approved as per mining plan. Please advise course of action incase there is a cap on production imposed by State government and the capacity as per approved mining plan is more. Minimum production requirement shall be % of lower of the EC or approved mining plan or any cap in production imposed by State Government. Please clarify. Also provide applicable laws in this regard.


88. MDPA 6 Utilisation of Mineral The Successful Bidder shall utilise the Mineral strictly in compliance with Applicable Law,

Whether the iron ore mined from this block can be exported? Is there any restriction on sale ore in domestic market? Many states have restriction on




S. No.





including the Act and the rules framed thereunder.

export of mineral. State Govt. had issued advisory earlier for sale of 50% production within the State. Please provide applicable laws in this regard. This Clarification is important as it will have help us in estimation of financial impact.


4. Introduction The Bidders are expected to conduct due diligence regarding the land to be comprised in the mining lease and also familiarize 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 Panchayats (Extension to the Scheduled Areas) Act, 1996, the Orissa Scheduled Areas Transfer of Immovable Property (By Scheduled

Particulars of land 1) Whether the Government land will be given on 50 years lease? If so, what will be the rent & other terms? 2) Forest clearance is required for entire forest land w.r.t. block, however the existing allottee already paid NPV and other expenses w.r.t. same forest land. We understand that the successful bidder has not to pay the expenses again for the same forest land. Please confirm our understanding. Shall it be possible to execute lease separately for forest & non-forest land. 3) Will the Govt. of Odisha assist the successful bidder in acquisition of such land?

Obtaining necessary approvals under relevant laws are the responsibility of the Preferred/ Successful bidder. The cost for the same needs to be borne by the Preferred/ Successful bidder.



S. No.





Tribes) Regulations, 1956, the Orissa Land Reforms Act 1960 and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation & Resettlement Act 2013.


17. Event of Force Majeure

The force majeure events should include delay/denial of approval from concern government authority as timeline for development of the deposit is stringent and successful bidder has to bear huge initial investment over upfront amount, performance security and expenditure over initial development of the project. It is requested that to safe guard the interest of the bidder, it is requested that delay/ denial of the approvals/clearances from concern authority should be considered as force majeure events. Reference can be taken from the major Coal/Iron MDO Tender floated by esteemed PSUs such as NMDC tenders.




S. No.






17.3. Upon occurrence of an Event of Force Majeure, the Successful Bidder shall:

It is requested that in case of termination of MDPA due to force majeure events, upfront amount and performance security along with written down value of Project specific assets shall be returned to Successful/Preferred bidder.




In case any new taxes imposed on mining activities or sale of Iron ore, we understand that it shall be covered in change of law and bidder shall not be liable to pay. Kindly confirm. Following text shall be read in clause 17.3 of MDPA. 17.3. Upon occurrence of an Event of Force Majeure, the Successful Bidder shall: (i)...... (ii)....... (iii) get refund of the balance upfront amount and Performance Security shall be returned to preferred bidder without any interest.


93. Tender Document for Auction of Nuagaon Iron Ore

Annexure II: Format of Bid Security 4. This Guarantee shall be irrevocable

Please insert the underlined text, as per Bank requirement This Guarantee shall be irrevocable and remain in full force for a period of 240 days from the Bid Due Date




S. No.





Block and remain in full force for a period of 240 days from the Bid Due Date i.e. [Insert Date] inclusive of a claim period of 60 days or for such extended period as may be mutually agreed between the State Government and the Bidder, and agreed to by the Bank, and shall continue to be enforceable till all amounts under this Guarantee have been paid.

i.e. [Insert Date] inclusive of a claim period of 60 days or for such extended period as may be mutually agreed between the State Government and the Bidder, and agreed to by the Bank, and shall continue to be enforceable till all amounts under this Guarantee have been paid or till such further extended period, whichever is earlier.


Annexure II: Format of Bid Security

As per our Bank, the following clarification has been raised while issuing Bid Security for this Project: Please insert following paragraph after point 12. This Guarantee is subject to THE ICC UNIFORM RULES FOR DEMAND GUARANTEES (ICC PUBLICATION NO. 758) and shall be governed by and construed in all respects, in accordance with the laws of India


95. Tender Document

Annexure II: Format of Bid Security 13.

As per our Bank, the following clarification has been raised while




S. No.





for Auction of Nuagaon Iron Ore Block

Notwithstanding anything contained herein,

issuing Bid Security for this Project: Please insert following paragraph after point 13. c. Thereafter, after all your rights under this guarantee shall be lapsed and we shall be released from all our liabilities hereunder irrespective of whether the guarantee in original is returned to us or not.


Schedule IV: Format of MDPA 4. Performance Security & Appropriation

As per our Bank, the following clarification has been raised while issuing Performance Security for this Project: Please insert following paragraph in the format of Performance Security after point 12. This Guarantee is subject to THE ICC UNIFORM RULES FOR DEMAND GUARANTEES (ICC PUBLICATION NO. 758) and shall be governed by and construed in all respects, in accordance with the laws of India.




As per our Bank, the following clarification has been raised while issuing Performance Security for this Project. Please insert following paragraph in the format of Performance Security after point 14. Thereafter, after all your rights under




S. No.





this guarantee shall be lapsed and we shall be released from all our liabilities hereunder irrespective of whether the guarantee in original is returned to us or not.


Bid Security Requesting your kind consent and amendment in the clause related to “Bank Guarantee” as we have received a confirmation from Bank that “Bank cannot issue bank guarantee payable at Bhubaneshwar. However, bank can issue guarantee operatable at Bhopal. “Hence we request you to make an amendment in clause “payable at Bhubaneshwar” to “either payable or operatable at Bhubaneshwar”.



4.2.1 Manner of Appropriation of the Performance security: In case of surrender of the entire area of the Mining Lease by the lessee- Entire Performance Security as per sub rule (3) of Rule 21 of Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016.

It is requested that; In case the default is due to successful bidder then only performance security shall be appropriated.




S. No.






Schedule IV: Format of MDPA

Request you to insert suggested points for legal clarity Dispute resolution/arbit ration process should be given in MDPA. Following clauses may be inserted 19.14 : Dispute resolution 19.14.1 Any dispute, difference or controversy of whatever nature howsoever arising under, or out of, or in relation, to this Agreement (including its interpretation) between the Parties, and so notified in writing by either Party to the other Party (the “Dispute”) shall, in the first instance, be attempted to be resolved amicably in accordance with the conciliation. 19.14.2 The Parties agree to use their best efforts for resolving all Disputes arising under or in respect of this Agreement promptly, equitably and in good faith, and further agree to provide each other with reasonable access during normal business hours to all non-privileged records, information and data pertaining to any Dispute.


101. Tender Document

Clause 4.3.1.6 - Manner of appropriation of the

We submit that if Lessee is required to surrender the area due to delay




S. No.





for Auction of Nuagaon Iron Ore Block

Performance Security - In case of surrender of the entire area of the Mining Lease by the lessee : Entire Performance Security as per sub rule (3) of Rule 21 of Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016.

not attributable to Bidder’s default, in such circumstances performance security should not be forfeited. The suggested clause is as below: In case of surrender of the entire area of the Mining Lease by the lessee due to preferred Bidder's default - Entire Performance Security as per sub rule (3) of Rule 21 of Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016.


9.2: The Successful Bidder shall obtain and maintain all Governmental Approvals required for conducting the mining operations at the Lease Area and performing its obligations under this Agreement.

Whether government is appointing any nodal agency or other mechanism for single window clearances of all applicable approvals for state government agencies so that operating mine can be start by 1st April 2020.



SCHEDULE E - WARRANTIES 3. GENERAL (h) except as set forth in any Mining Lease, all rights and interests of the Successful Bidder in

Following text shall be read in as: 3. GENERAL (h) except as set forth in any Mining Lease, all rights and interests of the Successful Bidder in and to the Lease Area shall pass to and vest in the




S. No.





and to the Lease Area shall pass to and vest in the relevant Governmental Authority on the date of termination or expiry hereof, free and clear of all Encumbrances without any further act or deed on the part of the Successful Bidder or the Central Government

relevant Governmental Authority on the date of termination or expiry hereof, free and clear of all Encumbrances without any further act or deed on the part of the Successful Bidder or the Central Government. In the event of termination of this Agreement, the Residential facilities and Fixed Infrastructure facilities developed by Successful Bidder shall be purchased by State Government at the written down value as per audited accounts of the Successful Bidder or the value assessed by mutually acceptable independent Government approved assessor whichever is lower. (The depreciation rate shall be as per applicable Companies Act).


4.1.2. The amount of Performance Security shall be reassessed every five years commencing from the date of issuance of the Performance Security i.e. [date], so that the amount of Performance Security corresponds to 0.5% of the reassessed

Please confirm that the Performance security amount shall be revised downwards if the reassessed value of estimated resources reduces.




S. No.





Value of Estimated Resources including the value of any newly discovered mineral that may be included in the Mining Lease deed on its discovery.


10.2. Declaration as a Successful Bidder: The Preferred Bidder shall be considered to be the “Successful Bidder” upon: b) payment of the second instalment of the Upfront Payment which is INR [Insert amount]; c) furnishing an irrevocable and unconditional Performance Security to the State Government from an Acceptable Bank and payable at Bhubaneswar, Odisha, pursuant to the Auction

There may be a possibility that requisite clearance specifically forest clearance or clearances for the project may not be accorded by concern authority. It is requested that, such incidents shall be considered as force majeure conditions. In such cases, upfront amount and performance security paid by bidder shall be returned back to Bidder without any appropriation. The Force Majuere clause may be referred as below: 17. EVENT OF FORCE MAJEURE 17.1. Event of Force Majeure means any of the following events or circumstances or combination of the following events or circumstances which are beyond the reasonable control of the Successful Bidder,




S. No.





Rules 10.3. Execution of Mine Development and Production Agreement: The State Government and the Successful Bidder shall enter into the MDPA upon the Successful Bidder having obtained all consents, approvals, permits, no-objections and the like as may be required under Applicable Law for commencement of mining operation.

which could not have been prevented by Good Industry Practice or by the exercise of reasonable skill and care and which or any consequences of which, have a material and adverse effect upon the performance by the Successful Bidder of its obligations or enjoyment of its rights:............. (i)............ (vii) Delay or revocation of, or refusal to renew or grant without valid cause, any clearance, licence, permit, authorisation, no objection certificate, consent, approval or exemption required by the preferred Bidder to perform their respective obligations under this Agreement ; provided that such delay, modification, denial, refusal or revocation did not result from the preferred Bidder's inability or failure to comply with any condition relating to grant, maintenance or renewal of such clearance, licence, authorisation, no objection certificate, exemption, consent, approval or permit. 17.4. If an obligation is suspended by reason of an Event of Force Majeure ………………………………………………………



S. No.





the Parties are negotiating the terms of any such revision. The Cost and loss sustained by either parties shall be borne by respective parties. 17.5 Relief for Unforeseen Events: Upon occurrence of an unforeseen event, situation or similar circumstances not contemplated or referred to in this Agreement, and which could not have been foreseen by a prudent and diligent person (the "Unforeseen Event"), any Party may by notice inform the other Party of the occurrence of such Unforeseen Event with the particulars thereof and its effects on the Project. Within 15 (fifteen) days of such notice, the Parties shall meet and make efforts in good faith to determine if such Unforeseen Event has occurred, and upon reaching agreement on occurrence thereof, the Parties shall in good faith determine the manner in which such Unforeseen Event shall be dealt with. 17.6 If NGT or any other Authority passes an order / directions which prevent the contractor to fulful its obligation under this contract and /



S. No.





or operations, then such event shall be treated as Force Majeure event. On occurrence of such event, Contractor shall be excused for performance of its obligations and neither party will compensate to other party.


Clause No. 5 ELIGIBILITY Sub Clause (d) The Mineral Block has been reserved for Specified End Use pursuant to the provison to sub-section (6) of Section 10B of the Act read with sub-rule (3) of rule 6 of the Auction Rules. The Bidder having a Specified End Use Plant shall be eligible to participate in the e-auction.

1. Is there any eligibility relation between requirement of Specified End Use Plant and Resources of Mineral Block. 2. Please Clarify sub-section (6) of Section 10B of the Act read with sub-rule (3) of rule 6 of the Auction Rules

Please clarify conversion factor to calculate requirement of end use plant & period of time.

As we are Integrated Steel Plant having Sponge iron and pellet Production facilities. Please clarify eligibility for production of 1 MT Sponge Iron & 1 MT of pellet & do it has any relation with grade of the mineral. The requirement of Iron ore is depended upon its Grade. Like 1.54 MT of Iron Ore with 65% Fe Content is required for production of 1 MT Sponge Iron. Similarly, 1.67 MT of Iron Ore with 60% Fe Content is required for production of 1 MT Sponge Iron and so on. Likewise 1.18 MT iron ore With 63% Fe content is

The Bidder having a Specified End Use Plant shall be eligible to participate in the e-auction. As per the Tender Document- “Specified End Use Plant shall mean a plant engaged in the production of sponge iron and/or pig iron and/or steel and/or pellets, owned by the Bidder and located in India"



S. No.





required for 1 MT pellet production.


Clause No. 5 ELIGIBILITY Sub Clause (d) The Mineral Block has been reserved for Specified End Use pursuant to the provison to sub-section (6) of Section 10B of the Act read with sub-rule (3) of rule 6 of the Auction Rules. The Bidder having a Specified End Use Plant shall be eligible to participate in the e-auction.

1. Is there any eligibility relation between requirement of Specified End Use Plant and Resources of Mineral Block. 2. Please Clarify sub-section (6) of Section 10B of the Act read with sub-rule (3) of rule 6 of the Auction Rules

Please clarify conversion factor to calculate requirement of end use plant & period of time.

As we are Integrated Steel Plant having Sponge iron and pellet Production facilities. Please clarify eligibility for production of 1 MT Sponge Iron & 1 MT of pellet & do it has any relation with grade of the mineral. The requirement of Iron ore is depended upon its Grade. Like 1.54 MT of Iron Ore with 65% Fe Content is required for production of 1 MT Sponge Iron. Similarly, 1.67 MT of Iron Ore with 60% Fe Content is required for production of 1 MT Sponge Iron and so on. Likewise 1.18 MT iron ore With 63% Fe content is required for 1 MT pellet production.

The Bidder having a Specified End Use Plant shall be eligible to participate in the e-auction. As per the Tender Document- “Specified End Use Plant shall mean a plant engaged in the production of sponge iron and/or pig iron and/or steel and/or pellets, owned by the Bidder and located in India"


Clause No. 5 ELIGIBILITY (A) Situation 1 : Can the calculation of networth be

To get a better understanding of the criteria

Please refer to Schedule I of the



S. No.





done on the following basis - ABC Private Ltd – 35 crores (Domestic Company) - XYZ Private Ltd. – 30 crores (Associate of ABC Pvt. Ltd.) - PQR Enterprises LLP - 18 crores (Associate of ABC Pvt. Ltd.) - Mr. A - 20 crores (Director in all the above cos.) -------------- Total Networth 103 crores Can ABC Private Limited include the networth of it’s associate companies to become an eligible bidder? (B) Situation 2 : Can ABC Private Ltd – (NW-35 crores), XYZ Private Ltd. – (NW- 30 crores), PQR Enterprises LLP (NW- 18 crores) and Mr. A - (NW-20 crores) jointly create a Special Purpose Vehicle in the form of a partnership firm in the name of A & Co. (SPV) to apply for the bidding having a networth of 103 crores.

for eligible bidder Mineral (Auction) Rules, 2015.


Clause No. 5 ELIGIBILITY Sub Clause (d) The Mineral Block has been reserved for Specified End Use

For every mine that is put for auction, the resources quantity has been mentioned in mineral block summary document issued with NIT. But the resource is not the minable quantity,

Mineable resource should be treated as 50% of resource.

The Value of Estimated Resources (VER) has been calculated as per the Mineral (Auction)



S. No.





pursuant to the proviso to sub-section (6) of Section 10B of the Act read with sub-rule (3) of rule 6 of the Auction Rules. The Bidder having a Specified End Use Plant shall be eligible to participate in the e-auction.

Hence the eligibility of specified end use plant should be considered as per mineable quantity.

Rules, 2015.


Clause No. 10.2 Point No. (C ) 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 0.5% of the reassessed Value of Estimated Resources (determined in accordance with the Auction Rules) & Clause No.12 sub clause 12.1 The Upfront Payment paid by the Successful Bidder shall be adjusted in full at the

The Performance security & Upfront amount should be considered on the basis of mineable quantity and it should not be as per resources as resource is not mineable.

Mineable resource should be treated as 50% of resource.




S. No.





earliest against the amount payable in accordance with the percentage of Value of Mineral Dispatched quoted as the Final Price Offer on commencement of production of mineral(s) as specified in MDPA.

111. Minimum Production Requirement

MDPA -8 Does new lessee have to maintain mining per year as per existing EC capacity? Or new lessee can submit new mining plan and capacities.

Obtaining necessary approvals under relevant laws are the responsibility of Preferred Bidder/ Successful Bidder

112. General rights and obligations

MDPA -9 Will existing EC and FC be transferred? If they are transferred then can the capacity of mine be reduced?

Obtaining necessary approvals under relevant laws are the responsibility of Preferred Bidder/ Successful Bidder

113. General rights and obligations

MDPA -9 What is the relevant regulation for stamp duty and registration payable upon signing of mining lease?




S. No.





114. Jaribahal Iron Ore Block.Tender-document.pdf

Schedule V: Format of Information Memorandum

Schedule V Format is missing It’s mentioned that schedule- V is attached separately to the Tender Document. But there is no such document found.



5 (b) 1. Whether M/s. Bhaskar Steel and Ferro Alloy Private Limited be treated as subsidiary of M/s. SRMB Srijan Private Limited for calculation of Net Worth on the ground that control of composition of Board of Directors of M/s. Bhaskar Steel and Ferro Alloy Private Limited is with M/s. SRMB Srijan Private Limited? 2.Whether Revaluation Reserve be considered for calculation of Net Worth?

1. We, M/s Bhaskar Steel and Ferro Alloy Private Limited having plant at Badtumkela, Rajamunda, Dist: Sundargarh (Orissa) with a manufacturing capacity of sponge iron, billet and captive power plant and end user of Iron Ore intend to apply for mining activity under auction in recent period. The Net Worth of our company is Rs. 51.75 Crores as on 31.03.2019. Our Board of Directors are: a. Mr. Nikunj Beriwala , b. Mr. Ashish

Companies Act Please refer to Schedule I of the Mineral (Auction) Rules, 2015.



S. No.





Beriwala , c. Mr. Navin Bhuwalka 2. Our flagship company under the same management is M/s SRMB Srijan Private Limited whose Net Worth as on 31.03.2019 is as under: Net Worth (Excluding Revaluation Reserve) : Rs. 157.54 Crore Net Worth (Including Revaluation Reserve) : Rs. 280.22 Crore The Board of Directors of SRMB is as under: a. Mr. Brij Mohan Beriwala b. Mr. Nikunj Beriwala c. Mr. Ashish



S. No.





Beriwala 3. Now as per Sec. 2(87) of Companies Act, 2013 “subsidiary company” or “subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company— (i) controls the composition of the Board of Directors; or (ii) exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies” In our case, Board of Directors of M/s. SRMB Srijan Private



S. No.





Limited and M/s. Bhaskar Steel and Ferro Alloy Private Limited controls each other. 4. Mining prospectus states that “In case an applicant is a subsidiary of another company incorporated in India, the Net Worth of such holding company may also be considered.”


Schedule V: Format of Information Memorandum

Information Memorandum not available in Tender Document

It's mentioned that Schedule- V is attached separately to the Tender Document. But no such document is found.



2.27 Value of mineral resources of Jaribahal mine block has been defined but what is the value of this block has not been stated.

Nil The value of Estimated Resources of Jaribahal Mine block not indicated in Tender Document.

The Value of Estimated Resources is computed as prescribed under Mineral (Auction) Rules, 2015.

118. GR -PMP FINAL

Page No. 9 & 10 Surface Rights, Forest Clearance , Environmental Clearance etc.

Nil Whether these clearances will be extended to the




S. No.





dated 28.05.2019.docx

successful bidder or these will have to be obtained afresh has not been stated in Tender Document.



Schedule IV: Format of MDPA (clause-3)

Stamp Duty Nil What would be the Cost of Stamp Duty for Registration of Lease Deed has not been stated anywhere.



Clause 4.1.iii. Indicative List of Clearances Required.

Nil Clause (4.1.iii), i.e. an indicative list of clearances and permissions required to be obtained with respect to such area for commencing mining operations is not found in the tender document.

Please refer to Mineral Block Summary that forms part of the Tender Document


Clause 11.13 Time table Nil The process of forward auction shall be done from 11 Dec 19 to 18th Dec 19. If the process will complete on 18th Dec 19, how can the preferred bidder be announced before it’s completion

As per Rule 9 of the Mineral (Auction) Rules, 2015

122. Jaribahal Iron Ore

Annexure 3 Power of Attorney Nil Annexure 3 mandates that Attorney must be in full




S. No.





Block.Tender-document.pdf

time employment of the bidder. Can a Director of the Company, who is not in full time employment be an Attorney on the strength of Board Resolution of the Company ?


Schedule I Format of Technical Bid Clause B(iv) It is stated that particulars of Mining lease held by the bidder or its affiliates must be submitted. But the term “affiliates” has not been defined anywhere.



General Royalty What would be the royalty payable by the successful bidder? If it is on the IBM price, will this price include the percentage premium or not ?

The applicable payments should be made based on the sale prices published by IBM.


clause 7 read with clause 11

REQUEST FOR EXTENSION OF TIME FOR QUERY SUBMISSION: ROIIDA II IRON ORE BLOCK

We most humbly request you to kindly consider our request to extend the due date for submission of pre bid queries from 25th October, 2019 to 31st October, 2019 required for Additional Information with

You are aware and will appreciate that the Tender document has voluminous geological related data and information, which is under evaluation. As the same is requiring more time, we are unable to compile the queries for pre-bid conference within scheduled due date of 25th October, 2019.

As per the Tender Document



S. No.





respect to the said Tender Document.


Clause 11 Time table: Issuance of Letter of Intent by State Govt is Jan 03, 2020.

Last date for issuing LOI is 3rd Jan 2020 and lease under auction will be expiring on 31.03.2020, thus time lag of 3 months. In such a case, what kind of preparatory works can be undertaken by preferred bidder between the date of LOI and expiry of Mining Lease.

To have access to mines for Mining plan preparation, survey etc., by the preferred bidder.



Clause 3.5 The Bidders are expected to conduct due diligence regarding the land to be comprised in the mining lease and also familiarize 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 Panchayats (Extension to the Scheduled Areas) Act, 1996, the Orissa Scheduled Areas

The tender Document is silent about the treatment of Mine Infrastructure. It is to be clarified that how the existing Mine Infrastructure is transferred to preferred Bidder and how to assess the cost of acquiring the Mine Infrastructure and the manner and timeframe of payment.

For assessing the mine infrastructure cost and it’s suitability to build into mine valuation model.




S. No.





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. At the request and cost of the Successful Bidder, the State Government may, in its sole discretion, provide assistance regarding acquisition of land comprised in the mining lease.

128. General Statutory Clearances like Environmental Clearance (EC) and Forest Clearance (FC) etc.,

Will the existing EC and FC be extended for the Successful Bidder to facilitate continuance of the Mining Operations till such time these approvals are obtained in the name of the Successful Bidder?

To facilitate successful bidder to continue mining operations till the clearances are obtained in the name of Successful bidder.


129. Mineral Block Summary published along with

Part B (Particulars of Statutory License, permits, permissions, concessions, approvals and consents related to

In the Details/Status Column against each Statutory clearance, it was mentioned that, “To be obtained by the Successful bidder/not applicable/if available, State to

To estimate timelines involved.

Obtaining necessary approvals under relevant laws are the responsibility of Preferred Bidder/



S. No.





NIT issued on 04.10.2019

mining operations) provide details” It is not clear whether all these statutory clearances are to be obtained afresh by preferred bidder.

Successful Bidder.

130. General Essential services within the mine post expiry of lease on 31.03.2020.

Since the existing lessees lease period expiring on 31.03.2020 and preferred bidder may not execute mining lease by that time after issuance of LOI in Jan’20, it is to be clarified the responsibility lies with whom for undertaking any essential activities. This is to ensure that the status of mine physicals (dumps, slopes, water logging etc.,) remains the same as on 31.03.2020.

For the sake of clarity and to understand the responsibility scope.

It is the responsibility of Preferred Bidder /Successful Bidder.

131. General Closing stock lying at mine head

As per Rule 12(gg) of MCR,2016, the prior lessee may be given 6 months to remove ore excavated during the currency of the lease. If the prior lessee is not able to remove within 6 months, it is to be clarified on the status of inventory.

For the sake of clarity and also how the prior lessee enters the mine to evacuate ore/mineral within 6 months post expiry of lease.



2.19. Specified End use “Specified End Use” means utilisation of the Iron Ore and Manganese by a Specified End Use Plant 2.20. Specified End use

In the Bid letter the bidder has to mention the name and the address of the specified End use plant and the capacity. → the eligibility of the bidder to participate should be linked to the requirement of the end user Plant

→At least for the captive use the bidder should not be allowed to retain more than its present requirement,

Otherwise it will lead to concentration / hoarding of mineral




S. No.





Plant “Specified End Use Plant” shall mean a plant engaged in the production of sponge iron and/or pig iron and/or steel and/or pellets, owned by the Bidder and located in India

Capacity. →Does it mean that if a bidder who does not have an end use plant but its subsidiary company has an end use plant cannot bid

133. Tender Document 9.2

The successful bidder is required to pay Final Price along with royalty. → Presently royalty is charged on processed ( Crushed ) fine and lump at one uniform rate i.e. @ lump N.B: Processed ( Crushed Fine ) is generated when lump is put to screening and crushing

→ Suppose the lump price is Rs 3000 and fines price is Rs 1000. But royalty is charged on processed ( crushed ) fines @ 15% of Rs 3000 → To decide the Value of Mineral Dispatched whether the processed fines will be calculated @ Rs 1000 or Rs 3000

→This has a significant impact on calculation of Value of Mineral Dispatched based on which the Reserve Price is determined


134. Tender Document Schedule D

Minimum Production requirement

It is being reasonably apprehended that → in case the bidder has less requirement of ore for end user plant, he will reduce production to meet it own requirement. → Otherwise also in absence of strict

→ The minimum production requirement should be fixed at 80% of the production capacity as per the mining plan from the

→ Utilising this relaxation any lessee can influence the availability of ore / mineral in the market.




S. No.





minimum production mandate the lessee may reduce production In both the cases the mineral development is hampered and leads to hoarding and concentration of mineral with few.

1st year of issuance of LOI.

135. Tender Document 5. Eligibility

Lease cannot be granted without duly approved mining plan → Requirement of forest clearance and Environmental Clearance for execution of lease and mining operation thereafter

Whether the successful bidder needs to prepare the mining plan / Forest Clearance / EC afresh? If so, is it mandatory that the proposed capacity should be equal to the earlier permitted capacity?


136. Tender Document 5. Eligibility (b) Networth

The networth of the bidder must be more than INR -----, calculated in accordance with the following conditions -------

Does it mean that if the Bidder has Rs 100 NW and for the 1st Mineral Block auction, the required NW is Rs 40, then for participating in the auction of the 2nd Mineral Block his available NW is Rs 60 OR it means for every auction the bidder NW will be Rs 100

For the purpose of eligibility Effective Net Worth shall be used where – Effective Net worth = Net Worth – Net Worth requirement of previously allocated mineral blocks, by making necessary changes in Schedule I of the Mineral (Auction) Amendment Rule

To participate in bid process of a mineral block, bidder is required to meet the net worth criteria as per clause 5 (b) of tender document. As per the rule there is no restriction on the number of mineral blocks a bidder can participate with available net worth capacity.




S. No.





2017 to use effective net worth for the purpose of eligibility criteria in mineral block auction.

137. General As per Rule 12(1)(gg) of the Mineral Concession Rules 2016, a lessee is allowed six months period after the expiry of the lease to take down and remove the mineral excavated and its other properties.

→ The old lessee will continue to occupy the lease area in pre-text of securing the infrastructure and the left out mineral. Hence it should be cleared that the act of the old lessee should not be a hindrance to the mining operation of the new lessee

If all conditions are fulfilled the new lease can be executed any date after 1.04.2020.

→ Harmonious exit and entry of the lessees can be ensured, if it is clarified before time that with the expiry of lease period, the lease area will be vested with the Govt free from encumbrances.


138. General Status of litigations / investigations / proceedings pending in different courts and committees and implication thereof on

→ It is being learnt that some of the lessees are facing criminal proceeding for violation of EP Act or FC Act →Litigations are also pending in

→ The tender document should contain the status of those litigation and likelihood implication on new lessee in the

→ The informed bidder will be in a better position to balance between the adverse impact vis-à-vis the business viability

As per Law.



S. No.





the new lessee Supreme Court post mining lease execution scenario

139. General NPV Payment → Since the mining lease area has been broken up for mining operation by the old lessee, naturally the vegetation growth has changed and the corresponding density as well

The tender document should indicate the applicable rate of NPV , in case the successful bidder required to get the fresh FC

→For economic assessment of block area the tentative NPV will be useful for the prospective bidder.

Obtaining necessary approvals under relevant laws are the responsibility of Preferred Bidder or Successful Bidder. The bidder is required to conduct its own Due Diligence. The cost for the same needs to be borne by the Preferred/ Successful bidder.


Forest Clearance for diversion of Forest Land to mining activity under section 2 of Forest Conservation Act 1980.

In case of forest land, the existing lessee has already paid the NPV, compensatory afforestation land / other expenses associated with the forest clearance. Please clarify whether the Preferred Bidder has to pay the NPV, bear expenses for CA land and other expenses for already divested forest land for mining purpose again

It is essential to get clarity on these aspects to ascertain the acquisition cost of the mine to determine our initial price offer/ final price offer. It will help bidders to take an informed decision taking into account the risks associated


141. Tender 5 (b) - Net Worth Assuming if the Bidder has a net worth of Rs.100 crores, whether he is eligible to participate in two mine blocks simultaneously where the net

Assessment of net worth eligibility will be made as per Schedule I of Mineral



S. No.





worth requirement is Rs 80 crores and Rs.90 crores respectively.

(Auction) Rules, 2015

142. Tender 5 (b) - Net Worth If a company does not qualify for net worth requirement as on 31.3.19 (immediate preceding financial year) but qualify's on the minimum networth front as as on 30.09.19 , then can the company submit networth certificate of 30.09.19 from the statutory auditor in order to qualify in the technical bid.

As per Schedule I of Mineral (Auction) Rules, 2015.


Explanation 1 of 5.b and in case an applicant is a subsidiary of another company incorporated in India, the net worth of such holding company may also be considered:

Will the Net Worth be considered of the consolidated accounts of the holding company or will it be sum total of the Net Worth of the Subsidiary which is the bidder and Holding Company? Please clarify with an example

Please refer to Schedule I of the Mineral (Auction) Rules, 2015


Explanation No 2 to the Schedule I of Auction Rules); 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 financial year ended immediately preceding the date of issuance of

In determining the free reserves of the company, whether securities premium can be included or not?

The free reserves of a company will be computed as per Sub-section 43 of Section 2 of the Companies Act, 2013



S. No.





notice inviting tender


3.6 - Pursuant to sub-rule (3) and sub-rule (4) of Rule 6 of the Auction Rules, the State Government reserves this Mineral Block for Specified End Use. Explanation (1) to clause 5(b) - In case an Applicant is a Subsidiary of Another company incorporated in India, the net worth of such holding company may also be considered.

Whether the minerals extracted by the bidding entity for the integrated steel plant of the Holding company be considered for the "75% threshold of specified end use". In other words, whether the specified end use plant of the Holding company be considered & included under the "specified end use" plant owned by the bidder i.e subsidiary?



3.6 - Pursuant to sub-rule (3) and sub-rule (4) of Rule 6 of the Auction Rules, the State Government reserves this Mineral Block for Specified End Use. Further 25% of total mineral extracted in the previous financial year, for which end use was specified can be sold in the current financial year

How will this 25% be derived in the first year of extraction?




S. No.






2.27 - “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 relevant State for a period of twelve months immediately preceding the month of computation of the Value of Estimated Resources.

For calculating the Estimated value of Reserves of a particular mine do we need consider the total Geological Resources as on particular date mentioned in block summary or the Projected Resources as on 31.03.20.

Projected resources.

148. General Queries

In the Iron ore Block summary EC limit (Annual) has been provided, can this be modified by the successful bidder. What is the requirement in case the successful Bidder wants to amend this Annual EC Limit to +20% /-20%

As per Law.


Schedule D As per the tender document, payments pertaining to royalty and




S. No.





others would be on the basis of actual despatches, whereas the penalty is based on minimum production requirements. In some cases, it is possible that the despatches are higher than the annual minimum production requirement (due to stock in hand at the beginning of the year), whereas the production of that year is lower than the required minimum production. In such a case, the required payment will be more than the minimum required. How is this situation going to be addressed?


i) Whether any payment has to be made for the existing infrastructure built on the mines (ETP, water management infrastructure, Fuel Station). If yes, then how will the same be calculated? ii) What would be the basis of making payments for existing infrastructure built on the mines and who will be the final authority to decide. iii) In case of any disagreement pertaining to mine's infrastructure payment, how will the matter be resolved? Whether Director of Mines




S. No.





would coordinate to resolve the issue? Please revert to these queries as it is critical to start and operate the mine.


i) Will the authority grant the Land Lease also along with the Mining Lease? Do the bidder need to make any payment in this regard? ii) How is the current lessee having right over the mining land? iii) How will the land held by the current lessee be transferred to successful bidder?



Whether the mining plan can be revised in consultation with the director of mines? What approvals would be required?



Whether the existing permits & approvals will be transferred to the Successful Bidder?



Sec 8A (7) of the MMDR Act states that "Any holder of a lease granted, where mineral is used for captive

Does this mean that the existing captive mine lessee can just match the price bid of the highest bidder without participating in the auction and win the new mining lease.

As per Law.



S. No.





purpose, shall have the right of first refusal at the time of auction held for such lease after the expiry of the lease period


Whether there are any specific rules for Mine closure?

Please refer to Mineral Conservation and Development Rules, 2017.


As per the notice inviting tender dated 04.10.19 & 14.10.19, please list out the mines which are being auctioned in "second attempt".

No mines.


10, MDPA - 8 In case the approved annual production / raising capacity of a running mine which is identified for bidding under captive mining category, is higher than the annual mineral consumption of participating Bidder a) Whether such a Bidder shall be allowed to participate in bidding of such mine? b) Whether the Bidder shall be allowed to reduce the annual approved production capacity in line with the captive requirement of Ore of its Plant. .

The Bidder needs to be allowed to reduce the annual approved production capacity of mines in line with the captive requirement of Ore of its Plant.

For Successful Bidding As per provisions of the applicable law prevalent at that time


11, Stage - II , Sl-3 For a successful Bidder rights of all statutory licences and clearances

It is suggested that a successful Bidder

For Successful Bidding Obtaining necessary approvals under



S. No.





which are available for the existing operative mines will be automatically transferred. a) Can a successful Bidder immediately starts his operation based on the available licences and clearances without physically transferring the same in his name? b) If yes, for how many years? c) If no, what will be the modus operandi?

immediately starts his operation based on the available licences and clearances without physically transferring the same in his name.

relevant laws are the responsibility of Preferred Bidder or Successful Bidder.


10.3 Two sorts of mines are under tendering :- i) Operational Mines. ii) Green Field Mines. What are the statutory approvals are available and what will be the further requirements for both types of mines.

It is suggested that the mines be operationalised based on the available statutory approvals till any further compliances.

For Successful Bidding Obtaining necessary approvals under relevant laws are the responsibility of Preferred Bidder/ Successful Bidder.


4.1 Certain mineral blocks are of bi-mineral mines (e.g. Iron Ore and Manganese Ore). a) Can end user of one mineral (i.e. Iron Ore) is eligible for bi-mineral mines? b) In such case can we sale the 100% material in the open market. c) If subsequently any other material

It is suggested that end user of one mineral (i.e. Iron Ore) will allow to sale 100% of other bi-mineral (i.e. Manganese Ore) in open market.

For Successful Bidding Please refer to Mineral (Auction) Rules, 2015.



S. No.





found can we sale it 100% and what will be the modus operandi?


9.1 Before hand how we will calculate the reserve price based on the monthly despatch for green field mines or in case of operative mines what are the production data?

The Reserve Price will be calculated % value of mineral despatch.

For Successful Bidding As per Tender Document.


12.1 Clarification required for basis of Upfront payment.

Upfront payment. For Successful Bidding Please refer to Rule 11 of Mineral (Auction) Rules, 2015.


9,12,14 Can we have explanatory clarification (in a matrix format) for the total payment and its process either through bank or by way of submission of BG?

Payment procedure and financial implications.



16.1 In case available resources or quality is lower than the tender quantity/quality. a) Whether financial adjustment on account of lesser quantity/quality is possible or not?

The financial adjustment be allowed on account of lower raising quantity / quality of mines

For Successful Bidding As per applicable laws

165. Notice Inviting Tender

Date - 04.10.19 Can Tender document purchase for one mine be utilise for another mine if the tender document value is same?

Tender documents for one mine be allowed to be utilised for another mine in the auction.

For Successful Bidding No.


5 Can one person participate more than one mines?

Single bidder be allowed to

For Successful Bidding Yes.



S. No.





participate in bidding process in multiple mines.


11 Time table for NIT dated 04.10.2019 , 14.10.19 & 18.10.19 a) Can we have NIT Specific date schedule of all the events ?

Specific date schedule of bidding be provided before purchase of Tender document.



3.6 Mineral block for specified end use - We have a production capacity of spong iron of 96000 MT pa. and further applied for 144000 MT pa. a) Will the calculation of captive consumption will be based on existing plant capacity or added capacity will be included ?

Iron ore raising is to be allowed considering the capacity to be enhanced of sponge iron in future.

For Successful Bidding As per Mineral (Auction) Rules, 2015.

169. For companies which have been under the IBC process for which a successful resolution plan has been submitted and taken over , for those companies can share premium be a part of networth Because in these cases the resolution applicant has infused funds under the resolution plan at a premium to bolster the networth. Hence for these cases can share premium be a part of networth.




S. No.





OR Can we take only the share capital for computing the networth for company which has been acquired under the IBC process

170. Tender Document for Auction of Mahulsukha Iron Ore Block

5. Eligibility b)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 shall continue to be a subsidiary of such holding company until such time the applicant meets the aforementioned net worth threshold. (2) In case of a Company, the net worth shall be the sum of paid

For Example: There is a Company “A” in existence and incorporated in India prior to the date of issuance of NIT and has audited balance sheet of financial year 2018-19. Company “B” which is also incorporated in India, holds 100% shares of Company of “A”. Before submission of bid, Company “C” buys 49% shares of Company “A” and thus Company “A” becomes JV Company of Company “B” and Company “C”. The majority shares (51%) of Company “A” is still with Company “B” as on date of submission of Bid. Company “B” has sufficient Net worth as on March 31, 2019 to meet qualifying criteria as required for Nuagaon Iron Ore ML tender. Since, Company “A” doesn’t have sufficient Net worth to meet qualifying requirement for




S. No.





up share capital and the free reserves as per the audited balance sheet of the financial year ended immediately preceding the date of issuance of notice inviting tender. 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’

Mahulsukha Iron Ore ML tender, it draws strength from its holding Company “B”. Please confirm whether as per the Tender conditions, Company “A” is eligible to participate in the tender on the basis of Net worth of Company “B”.


5. Eligibility b)Explanation In case an applicant is a subsidiary of another company incorporated in India, the net worth of such holding company may also be considered:

Can a successful bidder form a SPV to execute the project Kindly confirm as per applicable laws.




S. No.





Provided that, in such case, the applicant shall continue to be a subsidiary of such holding company until such time the applicant meets the aforementioned net worth threshold.


1. Important information 1.1 All information provided in this Tender Document should be read together with the Act and the rules framed thereunder. In the event of a conflict between this Tender Document and the Act or the rules, the Act or the rules (as amended from time to time), as the case may be, shall prevail. 9.2. It is clarified that payment in accordance with the Final Price Offer shall be required

As per tender condition, bidder has to follow MMDR Act and rules framed thereunder. All the miners has to submit monthly and annual return as per MCDR 2017, wherein miners has to provide sale price inclusive of Royalty, DMF, NMET excluding Taxes/GST. IBM is computing average sale price on the basis monthly return. Since Royalty is calculated on IBM published sale price, it seems that Royalty is calculated on Base price + Royalty + DMF+ NMET i.e. cascading effect is there on Royalty + DMF+ NMET resulting higher cash outflow by miners. To mitigate the above, it is requested to please consider Royalty on actual




S. No.





to be paid monthly in addition to the payment of royalty or dead rent, as applicable. Royalty on Iron Ore as per MMDR Act: 15% of Average sale price on ad valorem basis. As per MCDR 2017: CHAPTER VI Notices and Returns 45. Monthly and annual returns. (8) In case of mining of minerals by the holder of a mining lease, the– (a) sale value is the gross amount payable by the purchaser as indicated in the sale invoice, where the sale transaction is on an arms’ length basis and the price is the sole consideration for the sale, excluding taxes, if any. Explanation.– For the purpose of

sale price. The same may be consider through additional condition. Precedence can be taken from Madhya Pradesh State government’s Bunder Diamond Project, wherein royalty is to paid on actual sale price and not on IBM sale price.



S. No.





computing sale value, no deduction from the gross amount shall be made in respect of royalty, payments to the District Mineral Foundation and payments to the National Mineral Exploration Trust.



I. As per tender condition, Successful Bidder has to pay stamp duty during execution of MDPA and Mining Lease. We understand that stamp duty shall be paid as per Indian Stamp (Odisha Amendment) Act. However the ongoing litigation regarding stamp duty calculation for mining lease as per Indian Stamp (Odisha Amendment) Act 2013 at Hon’ble High court - Odisha is sub judice. Since Mahulsukha mine is under operation and it is expected that mining lease shall be executed in due course of time, please provide following information on stamp duty to estimate the project economics: • How much Stamp duty is to be paid




S. No.





during the execution of MDPA or Mining Lease

• Methodology for calculation of Stamp Duty and Registration Fee as per applicable laws.

II. Mining Lease shall be granted for a period of 50 yrs.

Since the calculation of stamp duty is dependent on period of mining lease, the grant of Mining lease period less than 50 years should be at the discretion of the successful bidder particularly for the mines whose resources are very limited thus life of mine would be less than 50 years.


10.3. Execution of Mine Development and Production Agreement: The State Government and the Successful Bidder shall enter into the MDPA upon the Successful Bidder having obtained all consents, approvals, permits, no-objections and the like as may be required

Mining Lease of Mahulsukha and many other iron ore mines are about to expire on 31st March 2020. In order to avoid disruption in supply of Iron ore to Steel Industry, production from all the operating mine should be continuous even after expiry of Mining leases. All the existing clearances will be co-terminus with Mining leases due to which successful bidder has to take




S. No.





under Applicable Law for commencement of mining operation.

afresh approval/clearance. For mining project, grant of fresh Environment and forest clearance takes 2-3 years time resulting delay in start of production from mine. Therefore it is requested that, Successful bidder should be allowed to mine with existing clearance for the mine for atleast 3 years, meanwhile successful bidder will apply and take afresh approvals.


3. Introduction 3.5 The Bidders are expected to conduct due diligence regarding the land to be comprised in the mining lease and also familiarize 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 Panchayats (Extension to the

For operating mine, existing allottee has acquired land (private, Government and forest) and created fixed infrastructure. In order to start the mine by 1st April 2020, land and fixed infrastructure set-up by existing allottee needs to be transferred to successful bidder at earliest. Please provide the policy guidelines and assistance from Government of Odisha to transfer the land and fixed infrastructure from existing allottee. The precedence can be taken from Coal block auction in 2015, wherein Ministry of Coal/CMPDI has provided assistance for smooth transaction of




S. No.





Scheduled Areas) Act, 1996, 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.

assets from existing allottee to new allottee.




As per applicable laws.


Clause 12.1 Upfront Payment The Upfront Payment paid by the Successful Bidder shall be adjusted in full at the earliest against the amount payable in accordance

Our understanding w.r.t upfront payment is that: until the upfront payment is fully adjusted against the monthly payment of percentage of value of mineral dispatch the successful bidder will not be required to make any payment. Kindly confirm.

As per Law



S. No.





with the percentage of Value of Mineral Despatched quoted as the Final Price Offer on commencement of production of mineral(s) as specified in MDPA.


Clause 11 Timetable Issuance of LOA 3rd Jan’2020 (T1) Submission of Performance Security and mining plan along with second installment (10%) of Upfront Payment by the Preferred Bidder to become Successful Bidder T2 (last date of submission is T1 + 2 years and 6 months) Mine Development Production Agreement (MDPA) to be executed between State Government & Successful Bidder upon obtaining all consents, approvals, permits, no-objections from various





S. No.





government agencies/departments required under applicable laws for commencement of mining operations. T2 + 4 months



Is there any possibility of simultaneous e-forward auction of the two blocks as multiple tender for Iron/Manganese ore have been issued by state government of Odisha. Participation with single registration/ DSC in both the blocks wouldn’t be possible.



Minimum production is linked to % of production approved as per mining plan. Please advise course of action incase there is a cap on production imposed by State government and the capacity as per approved mining plan is more. Minimum production requirement shall be % of lower of the EC or approved mining plan or any cap in production imposed by State Government. Please clarify.




S. No.





Also provide applicable laws in this regard.

181. MDPA 6 Utilisation of Mineral The Successful Bidder shall utilise the Mineral strictly in compliance with Applicable Law, including the Act and the rules framed thereunder.

Whether the iron ore mined from this block can be exported? Is there any restriction on sale ore in domestic market? Many states have restriction on export of mineral. State Govt. had issued advisory earlier for sale of 50% production within the State. Please provide applicable laws in this regard. This Clarification is important as it will have help us in estimation of financial impact.



4. Introduction The Bidders are expected to conduct due diligence regarding the land to be comprised in the mining lease and also familiarize 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

Particulars of land 1) Whether the Government land will be given on 50 years lease? If so, what will be the rent & other terms? 2) Forest clearance is required for entire forest land w.r.t. block, however the existing allottee already paid NPV and other expenses w.r.t. same forest land. We understand that the successful bidder has not to pay the expenses again for the same forest land. Please confirm our understanding. Shall it be possible to execute lease separately for forest & non-forest land.




S. No.





Conservation Act, 1980, the Panchayats (Extension to the Scheduled Areas) Act, 1996, 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.

3) Will the Govt. of Odisha assist the successful bidder in acquisition of such land?



The force majeure events should include delay/denial of approval from concern government authority as timeline for development of the deposit is stringent and successful bidder has to bear huge initial investment over upfront amount, performance security and expenditure over initial development of the project. It is requested that to safe guard the interest of the bidder, it is requested that delay/ denial of the




S. No.





approvals/clearances from concern authority should be considered as force majeure events. Reference can be taken from the major Coal/Iron MDO Tender floated by esteemed PSUs such as NMDC tenders.







In case any new taxes imposed on mining activities or sale of Iron ore, we understand that it shall be covered in change of law and bidder shall not be liable to pay. Kindly confirm. Following text shall be read in clause 17.3 of MDPA. 17.3. Upon occurrence of an Event of Force Majeure, the Successful Bidder shall: (i)...... (ii)....... (iii) get refund of the balance upfront




S. No.





amount and Performance Security shall be returned to preferred bidder without any interest.


Annexure II: Format of Bid Security 4. This Guarantee shall be irrevocable and remain in full force for a period of 240 days from the Bid Due Date i.e. [Insert Date] inclusive of a claim period of 60 days or for such extended period as may be mutually agreed between the State Government and the Bidder, and agreed to by the Bank, and shall continue to be enforceable till all amounts under this Guarantee have been paid.

Please insert the underlined text, as per Bank requirement This Guarantee shall be irrevocable and remain in full force for a period of 240 days from the Bid Due Date i.e. [Insert Date] inclusive of a claim period of 60 days or for such extended period as may be mutually agreed between the State Government and the Bidder, and agreed to by the Bank, and shall continue to be enforceable till all amounts under this Guarantee have been paid or till such further extended period, whichever is earlier.


187. Tender Document for Auction of Mahulsukh


As per our Bank, the following clarification has been raised while issuing Bid Security for this Project: Please insert following paragraph after point 12.




S. No.





a Iron Ore Block

This Guarantee is subject to THE ICC UNIFORM RULES FOR DEMAND GUARANTEES (ICC PUBLICATION NO. 758) and shall be governed by and construed in all respects, in accordance with the laws of India


Annexure II: Format of Bid Security 13. Notwithstanding anything contained herein,

As per our Bank, the following clarification has been raised while issuing Bid Security for this Project: Please insert following paragraph after point 13. c. Thereafter, after all your rights under this guarantee shall be lapsed and we shall be released from all our liabilities hereunder irrespective of whether the guarantee in original is returned to us or not.




As per our Bank, the following clarification has been raised while issuing Performance Security for this Project: Please insert following paragraph in the format of Performance Security after point 12. This Guarantee is subject to THE ICC UNIFORM RULES FOR DEMAND GUARANTEES (ICC PUBLICATION NO. 758) and shall be governed by and construed in all respects, in




S. No.





accordance with the laws of India.



As per our Bank, the following clarification has been raised while issuing Performance Security for this Project. Please insert following paragraph in the format of Performance Security after point 14. Thereafter, after all your rights under this guarantee shall be lapsed and we shall be released from all our liabilities hereunder irrespective of whether the guarantee in original is returned to us or not.



Bid Security Requesting your kind consent and amendment in the clause related to “Bank Guarantee” as we have received a confirmation from Bank that “Bank cannot issue bank guarantee payable at Bhubaneshwar. However, bank can issue guarantee operatable at Bhopal. “Hence we request you to make an amendment in clause “payable at Bhubaneshwar” to “either payable or operatable at Bhubaneshwar”.


192. Tender Document for Auction of Mahulsukh

4.2.1 Manner of Appropriation of the Performance security: In case of surrender of the entire area of the





S. No.





a Iron Ore Block

Mining Lease by the lessee- Entire Performance Security as per sub rule (3) of Rule 21 of Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016.



Request you to insert suggested points for legal clarity Dispute resolution/arbit ration process should be given in MDPA. Following clauses may be inserted 19.14 : Dispute resolution 19.14.1 Any dispute, difference or controversy of whatever nature howsoever arising under, or out of, or in relation, to this Agreement (including its interpretation) between the Parties, and so notified in writing by either Party to the other Party (the “Dispute”) shall, in the first instance, be attempted to be resolved amicably in accordance with the conciliation. 19.14.2 The Parties agree to use their best efforts for resolving all Disputes




S. No.





arising under or in respect of this Agreement promptly, equitably and in good faith, and further agree to provide each other with reasonable access during normal business hours to all non-privileged records, information and data pertaining to any Dispute.


Clause 4.3.1.6 - Manner of appropriation of the Performance Security - In case of surrender of the entire area of the Mining Lease by the lessee : Entire Performance Security as per sub rule (3) of Rule 21 of Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016.

We submit that if Lessee is required to surrender the area due to delay not attributable to Bidder’s default, in such circumstances performance security should not be forfeited. The suggested clause is as below: In case of surrender of the entire area of the Mining Lease by the lessee due to preferred Bidder's default - Entire Performance Security as per sub rule (3) of Rule 21 of Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016.



9.2: The Successful Bidder shall obtain and maintain all Governmental Approvals required for conducting the mining operations at the Lease





S. No.





Area and performing its obligations under this Agreement.


SCHEDULE E - WARRANTIES 3. GENERAL (h) except as set forth in any Mining Lease, all rights and interests of the Successful Bidder in and to the Lease Area shall pass to and vest in the relevant Governmental Authority on the date of termination or expiry hereof, free and clear of all Encumbrances without any further act or deed on the part of the Successful Bidder or the Central Government

Following text shall be read in as: 3. GENERAL (h) except as set forth in any Mining Lease, all rights and interests of the Successful Bidder in and to the Lease Area shall pass to and vest in the relevant Governmental Authority on the date of termination or expiry hereof, free and clear of all Encumbrances without any further act or deed on the part of the Successful Bidder or the Central Government. In the event of termination of this Agreement, the Residential facilities and Fixed Infrastructure facilities developed by Successful Bidder shall be purchased by State Government at the written down value as per audited accounts of the Successful Bidder or the value assessed by mutually acceptable independent Government approved assessor whichever is lower. (The depreciation rate shall be as per applicable Companies Act).



4.1.2. The amount of Performance Security

Please confirm that the Performance security amount shall be revised

Please refer to Rule 12 of Mineral



S. No.





for Auction of Mahulsukha Iron Ore Block

shall be reassessed every five years commencing from the date of issuance of the Performance Security i.e. [date], so that the amount of Performance Security corresponds to 0.5% of the reassessed Value of Estimated Resources including the value of any newly discovered mineral that may be included in the Mining Lease deed on its discovery.

downwards if the reassessed value of estimated resources reduces.

(Auction) Rules, 2015.


10.2. Declaration as a Successful Bidder: The Preferred Bidder shall be considered to be the “Successful Bidder” upon: b) payment of the second instalment of the Upfront Payment which is INR [Insert amount];

There may be a possibility that requisite clearance specifically forest clearance or clearances for the project may not be accorded by concern authority. It is requested that, such incidents shall be considered as force majeure conditions. In such cases, upfront amount and performance security paid by bidder shall be returned back to Bidder without any appropriation. The Force Majuere clause may be




S. No.





c) furnishing an irrevocable and unconditional Performance Security to the State Government from an Acceptable Bank and payable at Bhubaneswar, Odisha, pursuant to the Auction Rules 10.3. Execution of Mine Development and Production Agreement: The State Government and the Successful Bidder shall enter into the MDPA upon the Successful Bidder having obtained all consents, approvals, permits, no-objections and the like as may be required under Applicable Law for commencement of mining operation.

referred as below: 17. EVENT OF FORCE MAJEURE 17.1. Event of Force Majeure means any of the following events or circumstances or combination of the following events or circumstances which are beyond the reasonable control of the Successful Bidder, which could not have been prevented by Good Industry Practice or by the exercise of reasonable skill and care and which or any consequences of which, have a material and adverse effect upon the performance by the Successful Bidder of its obligations or enjoyment of its rights:............. (i)............ (vii) Delay or revocation of, or refusal to renew or grant without valid cause, any clearance, licence, permit, authorisation, no objection certificate, consent, approval or exemption required by the preferred Bidder to perform their respective obligations under this Agreement ; provided that such delay, modification, denial, refusal or revocation did not result from the preferred Bidder's inability or failure to comply with any condition relating



S. No.





to grant, maintenance or renewal of such clearance, licence, authorisation, no objection certificate, exemption, consent, approval or permit. 17.4. If an obligation is suspended by reason of an Event of Force Majeure ……………………………………………………… the Parties are negotiating the terms of any such revision. The Cost and loss sustained by either parties shall be borne by respective parties. 17.5 Relief for Unforeseen Events: Upon occurrence of an unforeseen event, situation or similar circumstances not contemplated or referred to in this Agreement, and which could not have been foreseen by a prudent and diligent person (the "Unforeseen Event"), any Party may by notice inform the other Party of the occurrence of such Unforeseen Event with the particulars thereof and its effects on the Project. Within 15 (fifteen) days of such notice, the Parties shall meet and make efforts in good faith to determine if such Unforeseen Event has occurred, and upon reaching agreement on



S. No.





occurrence thereof, the Parties shall in good faith determine the manner in which such Unforeseen Event shall be dealt with. 17.6 If NGT or any other Authority passes an order / directions which prevent the contractor to fulful its obligation under this contract and / or operations, then such event shall be treated as Force Majeure event. On occurrence of such event, Contractor shall be excused for performance of its obligations and neither party will compensate to other party.

199. Tender Documents

5 (a), Explanation (a) Association of Individuals is eligible to participate under Clause 5 (a) (1) but "Net worth" has not been defined under 5 (b) of the Tender Documents.

Combined Net Worth of Individual defined under Clause 5 (b) Explanation (4) should be considered for Net worth of " Association of Individual".

Due to not mentioning anywhere of Tender Documents .

As per Law

200. Tender Documents (Page No. 36)

Point No B (d) of Schedule I : Format of Technical Bid "Documents to evidence compliance with the eligibility conditions must be enclosed with

Clarification required about KYC Documents for "Association of Individuals"

PAN / Certificate of Registration from any Dept of Govt. evidencing its formation on the date of submission of Bid, should be

1) Nowhere in the Tender Document, it has been clarified. How an Association of Individual will apply ?

As per Law



S. No.





the bid letter............" produced.


Clause 5(b) Explanation (2) " In Case of a Company, the Net worth shall be sum of paid up share capital and free reserve as per audited balance sheet..................... "

Clarification required whether "Securities Premium" is part of Paid up capital for calculation of Net Worth in order to fulfilling eligibility criteria. Suppose, Paid up Capital :Rs.100Crs Security Premium: Rs.50Crs What will be Net Worth ? Whether Rs.150Crs or Rs.100Crs.

Net worth ' should be in accordance with section 2(57) of the Companies Act, 2013 which mentioned as below "Net Worth" means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and

1) Nowhere in the Tender Document, it has been clarified. 2) "Securities Premium " is Owners Fund and received against consideration of issue of Share. 3) Net worth defined under clause 5(b) Explanation 2 is inconsistent with Section 2(57) of Companies Act, 2013.




S. No.





amalgamation


Clause 5(b) Explanation (2) " In case of a Company, the Net worth shall be sum of paid up share capital and free reserve as per audited balance sheet..................... "

Clarification is required " Whether Accumulated Loss Amount as per Balance Sheet will be deducted from Paid up Capital.

Nowhere in the Tender Document, it has been clarified.



Clause 5(b) Explanation (2) " In case of a Company, the Net worth shall be sum of paid up share capital and free reserve as per audited balance sheet..................... "

Clarification is required " If Security Premium will not considered for Net Worth purposes, whether Accumulated Loss Amount as per Balance Sheet will be deducted from Security Premium for calculation Net worth in order to fulfilling eligibility criteria." Example : As on 31.03.19 Paid Up Share Capital : Rs. 100 Crs Security Premium : Rs.200Crs Accumulated Loss: Rs.50Crs If Security Premium of Rs. 200Crs will not be considered for Net Worth calculation, whether Accumulated Loss of Rs. 50Crs will be set off from Security Premium of Rs. 200 Crs.


204. Tender Clause 5 (b) Explanation Clarification required In case of (i) for It is not practical possible to Please refer to



S. No.





Documents (4) , In case of an individual, the net worth shall be the closing cash balance on the last date for submission of application, and such amount may include amount in savings bank accounts in Scheduled Bank or Post Office, free and un-encumbered fixed deposits in Scheduled Banks or Post Office, Listed Companies/Government organization or /Public Sector Undertaking of a State and the Central Government, Kisan Vikas Patra, National Saving certificate, Bonds, Shares of Listed Companies, Listed Mutual Funds, Unit Linked Insurance Plan, Public Provident Fund, Surrender Value of Life Insurance policies and un-encumbered immovable property in the name of Applicant.

i) " in case of Fixed Deposit, National Saving Certificate, Kisan Vikas Patra, Bond, Whether Principal Amount or Principal Amount including Accrued Interest, will be taken into account for calculating Net worth of Individual ? If Principal Amount including Accrued Interest will be considered, then what will be cut off date for calculating of accrued interest. ii) In case of Shares in Listed Companies, Listed Mutual Fund, Unit Linked Insurance Plan, whether Purchase Price or Market Value will be taken for calculation of Net worth ? If Market Value will be taken, then what will be the cutoff date for considering Market Value as it is practical difficult to take market value as on the date of submission of Bid ?

Fixed Deposit, National Saving Certificate, Kisan Vikas Patra, Bond, Principal Amount with Accrued Interest till cutoff date which is any date within 7days prior to due date of Bid submission. In case of (ii) for Shares in Listed Companies, Listed Mutual Fund, Unit Linked Insurance Plan, Market Value is to be taken for calculating of Net worth. The Cutoff date for calculating Market value should be taken any date within 7days prior to due date of Bid submission.

take due date of Bid submission as cutoff date.

Schedule I of the Mineral (Auction) Rules, 2015.



S. No.






Clause 5 (b) Explanation (4) , In case of an individual, the net worth shall be the closing cash balance on the last date for submission of application, ......................... in the name of Applicant.

Clarification required: Whether there is any holding period criteria for maintaining Net worth in case of Individual Applicant as like subsidiary company applicant for which it has been mentioned that "the applicant shall continue to be a subsidiary of such holding company until such time the applicant meets the aforementioned net worth threshold" ?

There should not be any holding period criteria for maintaining Net worth for Individual Applicant.

Nowhere in the Tender documents, it has been clarified. It may create ambiguity in future.



Clause 5 (b) Explanation (2) 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 financial year ended immediately preceding the date of issuance of notice inviting tender

Clarification required: Whether preference share capital is a part of Paid up Share Capital ?

Preference share capital should be part of Paid up share capital of company for calculation of Networth.

1) Nowhere clarified in the Tender Documents. 2) As per Section 43, Explanation (ii) of Companies Act, 2013, "Preference Share Capital", with reference to any company limited by shares means that part of the issued share capital of the company.......................



Clause 5 (b) Explanation (2) In case an applicant is a subsidiary of another company incorporated

Clarification required :- In just like, holding company, if an individual hold more than 51% shares in a company, whether Net Worth of Individual will clubbed with Net

It should be allowed to club.

The basic principle differ for one applicant to another.




S. No.





in India, the net worth of such holding company may also be considered: Provided that, in such case, the applicant shall continue to be a subsidiary of such holding company until such time the applicant meets the aforementioned net worth threshold.

worth of the Company for calculation Net Worth of Company like Subsidiary Company


Under Clause 2.20 : “Specified End Use Plant” shall mean a plant engaged in the production of sponge iron and/or pig iron and/or steel and/or pellets, owned by the Bidder and located in India

Clarification required : Whether 100% (full) ownership required in Plant or Partial Ownership ? If partial ownership allowed, whether it is required to own Substantial Interest with at least 26% or 51% ? Example : Say an Individual "A" hold 80% shares of a company B Ltd and B Ltd own the manufacturing plant. A wants apply bid in his name under Individual category and want to use the iron ore in the plant of B Ltd. Whether for Individual Bidder A, using iron ore in plant of B Ltd, will

It should be allowed As under Companies Act, 2013, if any person hold more than 51% shares, the ownership will be lie on that person.




S. No.





be counted as End Use Captive Plant.


Clause 3.6 The minerals extracted under the mining lease shall be utilized solely for the specified End Use and not be sold or transferred or otherwise disposed of, either directly or indirectly. Annexure-1, Bid Letter at Point.9 In table, to be mentioned Name, address and capacity of plant.

Whether the mineral of the captive mines of the bidder company can be utilized in, if set ups or acquires new plants in name of same company in future?


210. --do--

--do--

In case the Subsidiary company submits the bid with the net worth of holding company combined and takes the captive mines in it’s name whether it can supply the iron ore from that mines to the plant of holding company or not.


211. Auction Rule-2015 and Tender Document

Clause No.6 (5) of Auction Rule and Clause 3.6 of Tender Document.

Whether any criteria regarding the production capacity of the plant is fixed for captive use, for example a plant with existing capacity of 0.2 MTPA can participate or not for a captive mineral block of more than 100 milion Ton resource.



Clause No.10.3, Having obtained all consents,

For the presently working mines, whether the new bidder can operate




S. No.





approvals, permits, no-objections and the like as may be required under Applicable Law for commencement of mining operation

the mines with existing clearances of the present Lessee, right from 1st April 2020 onwards till execution of deed in his name.



Schedule-D, Minimum Production requirement and Clause-6.2 , All minerals extracted under the mining lease to be used solely for end use.

The mineral excavated from the mines deposit is ROM from which the required quantity of ore with size and grade specification is recovered by processing. Mining Plan/Scheme is prepared based on the ROM quantity. As the required iron ore for the Plant is a complete processed ore generated with a proportionate ratio to ROM production which does not match with the plant capacity, then the how the production proposal of Mining Plan/Scheme will be there. What will be about the remaining ore unconsumed by plant, left in the mines.

If the Mining Plan/Scheme is designed on the plant capacity, then how 25% of the excavated ore of previous year shall be sold to the outside



2.19. Specified End use “Specified End Use”

In the Bid letter the bidder has to mention the name and the address of

→At least for the captive use the

Otherwise it will lead to concentration / hoarding of

As per Mineral (Auction) Rules,



S. No.





means utilisation of the Iron Ore and Manganese by a Specified End Use Plant 2.20. Specified End use Plant “Specified End Use Plant” shall mean a plant engaged in the production of sponge iron and/or pig iron and/or steel and/or pellets, owned by the Bidder and located in India

the specified End use plant and the capacity. → the eligibility of the bidder to participate should be linked to the requirement of the end user Plant Capacity. →Does it mean that if a bidder who does not have an end use plant but its subsidiary company has an end use plant cannot bid

bidder should not be allowed to retain more than its present requirement,

mineral 2015.

215. Tender Document 9.2

The successful bidder is required to pay Final Price along with royalty . → Presently royalty is charged on processed ( Crushed ) fine and lump at one uniform rate i.e. @ lump N.B: Processed ( Crushed Fine ) is generated when lump is put to screening and crushing

→ Suppose the lump price is Rs 3000 and fines price is Rs 1000. But royalty is charged on processed ( crushed ) fines @ 15% of Rs 3000 → To decide the Value of Mineral Dispatched whether the processed fines will be calculated @ Rs 1000 or Rs 3000

→This has a significant impact on calculation of Value of Mineral Dispatched based on which the Reserve Price is determined




It is being reasonably apprehended that

→ The minimum production

→ Utilising this relaxation any lessee can influence the




S. No.





Schedule D → in case the bidder has less requirement of ore for end user plant, he will reduce production to meet it own requirement. → Otherwise also in absence of strict minimum production mandate the lessee may reduce production In both the cases the mineral development is hampered and leads to hoarding and concentration of mineral with few.

requirement should be fixed at 80% of the production capacity as per the mining plan from the 1st year of issuance of LOI.

availability of ore / mineral in the market.


Lease cannot be granted without duly approved mining plan → Requirement of forest clearance and Environmental Clearance for execution of lease and mining operation thereafter

Whether the successful bidder needs to prepare the mining plan / Forest Clearance / EC afresh? If so, is it mandatory that the proposed capacity should be equal to the earlier permitted capacity?





For the purpose of eligibility Effective Net Worth shall be used where – Effective Net worth = Net Worth – Net Worth requirement of previously allocated mineral blocks,





S. No.





by making necessary changes in Schedule I of the Mineral (Auction) Amendment Rule 2017 to use effective net worth for the purpose of eligibility criteria in mineral block auction.

219. General As per Rule 12(1)(gg) of the Mineral Concession Rules 2016, a lessee is allowed six months period after the expiry of the lease to take down and remove the mineral excavated and its other properties.



→ Harmonious exit and entry of the lessees can be ensured, if it is clarified before time that with the expiry of lease period, the lease area will be vested with the Govt free from encumbrances.

Please refer to Clause 3.5 of the Tender Document which states as follows: "The Bidders are expected to conduct due diligence regarding the land to be comprised in the mining lease and ............................. At the request and cost of the Successful Bidder, the State Government may, in its sole discretion, provide assistance regarding acquisition of land comprised in the mining lease".

220. General NPV Payment → Since the mining lease area has The tender →For economic assessment Obtaining necessary



S. No.





been broken up for mining operation by the old lessee, naturally the vegetation growth has changed and the corresponding density as well

document should indicate the applicable rate of NPV , in case the successful bidder required to get the fresh FC

of block area the tentative NPV will be useful for the prospective bidder.

approvals under relevant laws are the responsibility of Preferred Bidder or Successful Bidder. The bidder is required to conduct its own Due Diligence. The cost for the same needs to be borne by the Preferred/ Successful bidder.

221. General Status of litigations / investigations / proceedings pending in different courts and committees and implication thereof on the new lessee

→ It is being learnt that some of the lessees are facing criminal proceeding for violation of EP Act or FC Act →Litigations are also pending in Supreme Court

→ The tender document should contain the status of those litigation and likelihood implication on new lessee in the post mining lease execution scenario


As per Law


Clause 5(b) - Explanation (2)

Please confirm if there is a requirement for bidder to have been incorporated at least one year prior to the date of issuance of notice inviting tender

We understand that the requirement to submit audited balance sheet for the preceding financial year (refer Explanation) is being read as the need for the bidder to be incorporated at least one year back. However, in the Act, Mineral




S. No.





Auction Rules 2015 read with amendment in 2017 and tender document, there is no specific mention of the same as one of the eligibility conditions.


Clause 5(c ) It is urged that additional condition pertaining to compliance of maximum mine production capacity as per existing EC in the mine (say, minimum 80% of the EC capacity of the existing MLs) may be defined.

Furthermore, in the financial year immediately preceding the date of issuance of notice, the mineral production from such area where ML has been issued should have been at least eighty (80) percent of the scheduled yearly production as per the approved mining plan.

Increasing the area limit in respect of Iron Ore and associated minerals will favour large players at the expense of small to medium sized steel producers in India. Unlike coal block auction where eligibility of bidders was linked to annual demand, mineral auctions only specify net worth as the sole eligibility criteria. There is a fair risk of large players trying to secure mining leases irrespective of the demand and trying to create competitive barriers for other players. It may be interesting to note that the total ML area of all the twenty (20) mines being put up for auction in the current two tranche is less




S. No.





than 5800 Ha (58 sq km). Theoretically, a single player can secure all mining leases. Specifying minimum production limit will ensure that the existing MLs for such players are optimally used before they are allowed to secure more MLs


Clause 5(d) Please suggest if a bidder can bid based on the captive plant being owned by his holding and/or subsidiary and/ or associate company.



Clause 5(d) Please suggest if a company can supply mineral from a mine secured in the auction to end use plant(s) of its Group company

This is required for optimum utilisation of iron ore resources of all grades and to achieve cost efficiencies. It may be noted that the same provisions are available in the case of captive coal mines in India (refer rule 20, Coal Mines (Special Provisions) Rules, 2015)



Clause 9 It is urged that the reserve price for the mine should be revised lower to a more reasonable number, say 15%.

Rule 8(1) of Mineral Auction Rules 2015 says the reserved price to be specified by the State Government is for a 'mineral' and not for a




S. No.





mineral from a particular mine. It means it could be different for different minerals viz iron ore, gold, limestone, chromite etc but cannot be different for these iron ore mines under the auction. The key objective of mineral auctions is to allocate resources transparently. Government may not make it a revenue maximizing activity. Competition shall ensure that the mines find economic level of additional premium/ revenue share. Setting a higher reserve price will unnecessary and unreasonable competition among bidders and impact long term viability of iron ore to end use plants.


Clause 10.3 Please clarify the status of current EC and FC at the expiry of ML. Also, please clarify if the GoI? GoO intends to extend/ provide interim EC and FC to the successful allottee.

In absence of an enabling mechanism to allocate interim EC and FC and/ or extension of current EC and FC to the successful allottee,




S. No.





these working mines will be no different than a greenfield block with similar time to production. It will be detrimental to the steel industry in India and also to State Government and public at large in terms of increased prices, loss of revenue, loss of employment opportunities. Reduction EC and thereby production will adversely impact the availability of iron ore and also loss of revenue to the state government We urge that the auction should only be initiated post the issue is resolved.

Successful Bidder.


Clause 10.3 Minimum Production Requirement (Schedule D)

The Successful Bidder shall meet the annual Minimum Production Requirement which shall be eighty (80) percent of the production for that

For a working mine, setting minimum production requirement as sixty (60) per cent will lead to loss of revenue to the State Government and also limit iron ore supply thereby




S. No.





year as per the approved Mining Plan.

adversely impacting the competitiveness of steel sector in India.


Clause 3.5 In case of forest land, please clarify Case 1: Whether FCs of prior allottee can be transferred to new allottee? Case 2: In case of obtaining new FC by new allottee, a) Whether payment of NPV applicable. b) Whether requirement of land for compensatory afforestation applicable. c) In case of broken forest land, whether same NPV amount will be applicable as for virgin forest land?





We understand that the requirement to submit audited balance sheet for the preceding financial year (refer Explanation) is being read as the need for the bidder to be incorporated at least one year back. However, in the Act, Mineral Auction Rules 2015 read with amendment in 2017 and tender document, there




S. No.





is no specific mention of the same as one of the eligibility conditions


Clause 5(c ) It is urged that additional condition pertaining to compliance of maximum mine production capacity as per existing EC in the mine (say, minimum 80% of the EC capacity of the existing MLs) may be defined.

Furthermore, in the financial year immediately preceding the date of issuance of notice, the mineral production from such area where ML has been issued may have been at least eighty (80)percent of the scheduled yearly production as per the approved mining plan.

Increasing the area limit in respect of Iron Ore and associated minerals will favour large players at the expense of small to medium sized steel producers in India. Unlike coal block auction where eligibility of bidders was linked to annual demand, mineral auctions only specify net worth as the sole eligibility criteria. There is a fair risk of large players trying to secure mining leases irrespective of the demand and trying to create competitive barriers for other players. Specifying minimum production limit will ensure that the existing MLs for such players are optimally used before they are allowed to secure more MLs. It may be interesting to note




S. No.





that the total ML area of all the twenty (20) mines being put up for auction in the current two tranche is less than 5800 Ha (58 sq km). Theoretically, a single player can secure all mining leases.









Clause 10.3 Please clarify the status of current EC and FC at the expiry of ML. Also, please clarify if the GoI? Govt. intends to extend/ provide interim EC and FC to the successful allottee.

In absence of an enabling mechanism to allocate interim EC and FC and/ or extension of current EC and FC to the successful allottee, these working mines will be no different than a Greenfield block with similar time to production. It will be detrimental to the steel industry in India and also to State Government and public at large in terms of increased prices, loss of revenue, loss of




S. No.





employment opportunities. We urge that the auction may only be initiated post the issue is resolved.



The Successful Bidder shall meet the annual Minimum Production Requirement which shall be eighty (80) percent of the production for that year as per the approved Mining Plan

For a working mine, setting minimum production requirement as sixty (60) percent will lead to loss of revenue to the State Government and also limit iron ore supply thereby adversely impacting the competitiveness of steel sector in India.


236. Clause 3.5 In case of forest land, please clarify Case 1: Whether FCs of prior allottee can be transferred to new allottee? Case 2: In case of obtaining new FC by new allottee, a) Whether payment of NPV applicable. b) Whether requirement of land for compensatory afforestation applicable. In case of broken forest land, whether same NPV amount will be applicable as for virgin forest land?




S. No.








We understand that the requirement to submit audited balance sheet for the preceding financial year (refer Explanation) is being read as the need for the bidder to be incorporated at least one year back. However, in the Act, Mineral Auction Rules 2015 read with amendment in 2017 and tender document, there is no specific mention of the same as one of the eligibility conditions


238. Clause 5(c ) It is urged that additional condition pertaining to utilization of existing mining leases (say, minimum 80% of the EC capacity of the existing MLs) may be defined.

"Furthermore, in the financial year immediately preceding the date of issuance of notice, the mineral production from such area where ML has been issued may have been at least eighty (80) percent of the scheduled yearly production as per the approved mining plan."

Increasing the area limit in respect of Iron Ore and associated minerals will favour large players at the expense of small to medium sized steel producers in India. Unlike coal block auction where eligibility of bidders was linked to annual demand, mineral auctions only specify net worth as the sole eligibility criteria. There is a fair risk of large players trying to secure mining leases irrespective of the demand and trying to




S. No.





create competitive barriers for other players. Specifying minimum production limit will ensure that the existing MLs for such players are optimally used before they are allowed to secure more MLs. It may be interesting to note that the total ML area of all the twenty (20) mines being put up for auction in the current two tranche is less than 5800 Ha (58 sq km). Theoretically, a single player can secure all mining leases.






It may be noted that the same provisions are available in the case of captive coal mines in India (refer rule 20, Coal Mines (Special Provisions) Rules, 2015)



Clause 10.3 Please clarify the status of current EC and FC at the expiry of ML. Also,

In absence of an enabling mechanism to allocate




S. No.





please clarify if the GoI? GoO intends to extend/ provide interim EC and FC to the successful allottee

interim EC and FC and/ or extension of current EC and FC to the successful allottee, these working mines will be no different than a Greenfield block with similar time to production. It will be detrimental to the steel industry in India and also to State Government and public at large in terms of increased prices, loss of revenue, loss of employment opportunities. We urge that the auction may only be initiated post the issue is resolved.




The Successful Bidder shall meet the annual Minimum Production Requirement which shall be eighty (80) percent of the production for that year as per the approved Mining Plan.




Clause 3.5 In case of forest land, please clarify




S. No.





Case 1: Whether FCs of prior allottee can be transferred to new allottee? Case 2: In case of obtaining new FC by new allottee, a) Whether payment of NPV applicable. b) Whether requirement of land for compensatory afforestation applicable. In case of broken forest land, whether same NPV amount will be applicable as for virgin forest land?

relevant laws are the responsibility of the Preferred/ Successful bidder. The cost for the same needs to be borne by the Preferred/ Successful bidder.




We understand that the requirement to submit audited balance sheet for the preceding financial year (refer Explanation) is being read as the need for the bidder to be incorporated at least one year back. However, in the Act, Mineral Acution Rules 2015 read with amendemnt in 2017 and tender document, there is no specific mention of the same as one of the eligibility conditions


245. Tender Clause 5(c) It is urged that additional condition Increasing the area limit in As per Tender



S. No.





Document pertaining to utilization of existing mining leases (say, minimum 80% of the EC capacity of the existing MLs) may be defined.

respect of Iron Ore and associated minerals will favour large players at the expense of small to medium sized steel producers in India. Unlike coal block auction where eligibilty of bidders was linked to annual demand, mineral auctions only specify net worth as the sole eligibility criteria. There is a fair risk of large players trying to secure mining leases irrespective of the demand and trying to create competitive barriers for other players. Specifying minimum production limit will ensure that the existing MLs for such players are optimally used before they are allowed to secure more MLs.It may be interesting to note that the total ML area of all the twenty (20) mines being put up for auction in the current two tranche is less than 5800 Ha (58 sq km). Theoritically, a single player can secure all mining leases.

Document



S. No.










It may be noted that the same provisions are available in the case of captive coal mines in India (refer rule 20, Coal Mines (Special Provisions) Rules, 2015)



Clause 10.3 Please clarify the status of current EC and FC at the expiry of ML. Also, please clarify if the GoI? GoO intends to extend/ provide interim EC and FC to the successful allottee.

In absence of an enabling mechanism to allocate interim EC and FC and/ or extension of current EC and FC to the successful allottee, these working mines will be no different than a Greenfield block with similar time to production. It will be detrimental to the steel industry in India and also to State Government and public at large in terms of increased prices, loss of revenue, loss of employment opportunities. We urge that the auction may only be initiated post




S. No.





the issue is resolved.



The Successful Bidder shall meet the annual Minimum Production Requirement which shall be eighty (80) percent of the production for that year as per the approved Mining Plan.




2.19. Specified End use “Specified End Use” means utilisation of the Iron Ore and Manganese by a Specified End Use Plant 2.20. Specified End use Plant “Specified End Use Plant” shall mean a plant engaged in the production of sponge iron and/or pig iron and/or steel and/or pellets, owned by the Bidder and located in India

In the Bid letter the bidder has to mention the name and the address of the specified End use plant and the capacity. → the eligibility of the bidder to participate should be linked to the requirement of the end user Plant Capacity. →Does it mean that if a bidder who does not have an end use plant but its subsidiary company has an end use plant cannot bid

→At least for the captive use the bidder should not be allowed to retain more than its present requirement,

Otherwise it will lead to concentration / hoarding of mineral



The successful bidder is required to pay Final

→ Suppose the lump price is Rs 3000 and fines price is Rs 1000. But royalty

→This has a significant impact on calculation of

As per provisions of the applicable law



S. No.





9.2 Price along with royalty . → Presently royalty is charged on processed ( Crushed ) fine and lump at one uniform rate i.e. @ lump N.B: Processed ( Crushed Fine ) is generated when lump is put to screening and crushing

is charged on processed ( crushed ) fines @ 15% of Rs 3000 → To decide the Value of Mineral Dispatched whether the processed fines will be calculated @ Rs 1000 or Rs 3000

Value of Mineral Dispatched based on which the Reserve Price is determined

prevalent at that time.

252. Tender Document Schedule D


It is being reasonably apprehended that → in case the bidder has less requirement of ore for end user plant, he will reduce production to meet it own requirement. → Otherwise also in absence of strict minimum production mandate the lessee may reduce production In both the cases the mineral development is hampered and leads to hoarding and concentration of mineral with few.

→ The minimum production requirement should be fixed at 80% of the production capacity as per the mining plan from the 1st year of issuance of LOI.

→ Utilising this relaxation any lessee can influence the availability of ore / mineral in the market.



Lease cannot be granted without duly approved mining plan → Requirement of forest clearance and

Whether the successful bidder needs to prepare the mining plan / Forest Clearance / EC afresh? If so, is it mandatory that the proposed capacity should be equal to




S. No.





Environmental Clearance for execution of lease and mining operation thereafter

the earlier permitted capacity? Successful Bidder.




For the purpose of eligibility Effective Net Worth shall be used where – Effective Net worth = Net Worth – Net Worth requirement of previously allocated mineral blocks, by making necessary changes in Schedule I of the Mineral (Auction) Amendment Rule 2017 to use effective net worth for the purpose of eligibility criteria in mineral block auction.



255. General As per Rule 12(1)(gg) of the Mineral Concession Rules 2016, a lessee is allowed six months period after the expiry of the lease to take down and remove the



→ Harmonious exit and entry of the lessees can be ensured, if it is clarified before time that with the expiry of lease period, the lease area will be vested with the Govt free from

Please refer to Clause 3.5 of the Tender Document which states as follows: "The Bidders are expected to conduct due diligence



S. No.





mineral excavated and its other properties.

encumbrances. regarding the land to be comprised in the mining lease and ............................. At the request and cost of the Successful Bidder, the State Government may, in its sole discretion, provide assistance regarding acquisition of land comprised in the mining lease".

256. General Status of litigations / investigations / proceedings pending in different courts and committees and implication thereof on the new lessee

→ It is being learnt that some of the lessees are facing criminal proceeding for violation of EP Act or FC Act →Litigations are also pending in Supreme Court

→ The tender document should contain the status of those litigation and likelihood implication on new lessee in the post mining lease execution scenario


As per Law.

257. General NPV Payment → Since the mining lease area has been broken up for mining operation by the old lessee, naturally the vegetation growth has changed and the corresponding density as well

The tender document should indicate the applicable rate of NPV , in case the successful bidder required to get the fresh FC

→For economic assesment of block area the tentative NPV will be useful for the prospective bidder.

Obtaining necessary approvals under relevant laws are the responsibility of Preferred Bidder or Successful Bidder. The bidder is required to conduct its own Due Diligence. The cost



S. No.





for the same needs to be borne by the Preferred/ Successful bidder.

258. Tender document

Explanation (1) to Clause 2(b) of Eligibility criteria

If the subsidiary company is formed after threshold date for Net worth calculation and holding company was formed prior to such threshold date, whether such newly formed subsidiary can bid on the basis of Net worth of it's holding company?

To clear the ambiguity in case where subsidiary did not exist on threshold date for Net worth calculation

Please refer to Schedule I of Mineral (Auction) Rules, 2015 will be considered for declaration of Preferred Bidder. The relevant portion is provided below. "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 shall continue to be a subsidiary of such holding company until such time the applicant meets the aforementioned net



S. No.





worth threshold."

259. Do Clause 2.27 Value of Estimated Resources

The old dumps with Fe content +45%, whether it has been taken in value calculation of resource or not?

Suggest clarification in both in tender document and GR

As all these mines are being under auction are already completed 50 years of mining operation. As in earlier period below 60% Fe content was considered as sub grade and below that was considered as mineral rejects and waste . Clarification is required that these can be mined or not?

The Value of Estimated Resource has been computed as prescribed under Mineral (Auction) Rules, 2015.

260. Do Clause 10.3 Declaration of Successful Bidder

It is not clarified in Clause 10.3 about extension of exiting statutory clearances like EC , Forest clearances etc. to successful bidder.

Suggest Clarification in Tender document

The mine should be in ready to mine position at the time of full and final payment of 3rd installment of upfront payment and performance security.

Obtaining necessary approvals under relevant laws are the responsibility of Preferred Bidde/ Successful Bidder.

261. Mine Development and Production Agreement

Clause 4.3.1.6 - Manner of appropriation of the Performance Security - In case of surrender of the entire area of the Mining Lease by the lessee

We submit that if Lessee is required to surrender the area due to delay in obtaining any Statutory approvals or operation becoming uneconomical or due to any reason beyond the control of the lessee, in such




S. No.





circumstances performance security should not be forfeited

262. Do Clause 8.3 - Any non-compliance with the Minimum Production Requirement would result in appropriation of the Performance Security

We submit that reason for not meeting the minimum production requirement should be assessed holistically such as delay in getting statutory clearances, operation becoming uneconomical, Geological issue etc. In such situation performance security should not be forfeited.


263. Clause 17 – Force Majeure

Considering the sensitivity attached with the Block, we submit that following should also be considered as Force Majeure – 1. Non availability/grant of statutory clearances by State/Central




S. No.





Govt. 2. Geological difficulty leading to closure or reduced production

264. Stamp duty calculation methodology

Kindly clarify the methodology that will be adopted for stamp duty calculation

Required for Bid preparation The stamp duty on the Power of Attorney shall be payable in accordance with the provisions of the Indian Stamp Act, 1899 as applicable to the state of Odisha.

265. Applicability of GST on Revenue Sharing

Whether GST is applicable on Revenue Sharing with State Govt.

Required for Bid preparation As per provisions of the applicable law prevalent at that time

266. Purchase of tender documents for iron ore

Please suggest the mechanism through which we can obtain the GST Invoices for the same from Government of Odisha, Directorate of Mining

Required for due accounting and availing Input GST Credit

As per Law

267. Will there be State Support Agreement with Successful bidder for all clearance related matters, basic infrastructure along with forest and environmental clearance for the project?


268. For working mines, facilities surrendered by existing mine owners

In case infrastructure is not handed over it will delay the

Any financial transaction between



S. No.





would be handed over to the successful bidder at what the timeline and cost? Will the State Government play a facilitative role?

production. the bidder and the present lessee will be the responsibility of the Preferred/ Successful Bidder.

269. Will existing lessee get time to remove material produced and shifting of infrastructure from mine

Required for forecasting the production timelines

As per Law

270. What is the Role / support which will be provided by State Govt. to the bidder in land acquisition, R & R activities and statutory clearances with broad timeline?

The support of the State Government will be crucial in getting the project executed in a timely manner

Obtaining necessary approvals under relevant laws are the responsibility of Preferred Bidder or Successful Bidder. Please refer to Clause 3.5 of the Tender Document which states as follows: "The Bidders are expected to conduct due diligence regarding the land to be comprised in the mining lease and .............................. At the request and cost of the Successful Bidder, the State Government may, in its sole discretion,



S. No.





provide assistance regarding acquisition of land comprised in the mining lease".

271. Please clarify the employment provisions of existing employees (regular/contractual) after successful auction of the mine. Whether the successful Bidder will have to give employment to them on existing employment terms & conditions? Since production will start after getting all the statutory clearances which will take around 3-4 years, whether successful bidder has to keep idle all the employee till the mine start production.


272. Reserve price is very high and should be made reasonable and max 10-15%.

The competitive process, by itself, will lead to price discovery through the Forward Auction. Keeping the reserve price lower will encourage wider participation • For instance, reserve price is 50% for Nuagaon. Preparation of business case basis geological resource and committing 50% upfront on revenue share




S. No.





may be not be sustainable in longer run.

273. The exact manner in which this computation methodology for calculating VER (Value of Estimated Resources) for each mineral block has not been disclosed

As prescribed under Mineral (Auction) Rules, 2015.

274. It is to be noted that available mineral resource are to be converted to mineral reserves after application of modifying factors which forms the basis of economically extractable mineral reserves and preparing a business case for mining project. Further in the current context, the iron ore with grade 45 – 55% is not marketable, however while estimation of VER all grades are taken into consideration. Thus inclusion of ore with grade 45 – 55% significantly overstates the actual realizable value of the block. Thus rationally valuing the block will help reduce the VER and thereby net worth requirement and help in wider participation in mineral block auction.

Mineral reserves will be much lower than resources and all valuation estimation is being done on resource, thus the bidder is overpaying/blocking its financial capital in such case.


275. All Blocks should be auctioned without any end use restrictions to get the competitive rates from




S. No.





interested parties

276. Inverted duty structure on Revenue and Royalty distorts the level playing field for merchant miners and thus the government should look at how the same can be rationalized.


277. Details of land acquisition, R&R and local issue in the mines

Please refer to Clause 3.5 of the Tender Document which states as follows: "The Bidders are expected to conduct due diligence regarding the land to be comprised in the mining lease and ............................. At the request and cost of the Successful Bidder, the State Government may, in its sole discretion, provide assistance regarding acquisition of land comprised in the mining lease".

278. Any Employment/commitment of employment made to local people, any copy of agreement




S. No.





279. What about the existing commitment made by Lessee to locals, whether same has to be honored by Successful Bidder. Please provide the details list of such commitment to locals.


280.

How private land will be transferred and cost for the same.

Please refer to Clause 3.5 of the Tender Document which states as follows: "The Bidders are expected to conduct due diligence regarding the land to be comprised in the mining lease and .............................. At



S. No.





the request and cost of the Successful Bidder, the State Government may, in its sole discretion, provide assistance regarding acquisition of land comprised in the mining lease".

281.

Whether statutory clearances will be transferred otherwise fresh clearances will delay the start of mining.


282.

Whether NPV charges for Forest and Compensatory Afforestation charges to be paid again as same has been paid by existing lessee.


283.

In case subsidiary is drawing Net worth strength from its holding, whether Statutory auditor certificate for Net worth of holding to be issued by Statutory Auditor of Holding company or by Statutory auditor of

Statutory auditor of the holding company for the certificate of the holding company and statutory auditor of the subsidiary for



S. No.





subsidiary company the certificate of the subsidiary company.

284. Tender Document- Mining Lease

Clause-11 : Timetable “Bid Due Date (Technical + initial price offer) [on or before 12:00 noon (IST)] “ “Opening of the Technical Bids at 15.00 hours (IST) on Monday, November 18, 2019”

As the Bid Due Date and the date of opening of the Technical Bids is the same i.e. 18th November, 2019, will the Technical bids be opened in the presence of all representatives of the bidders. Opening of Technical Bids in the presence of representatives of the bidders would result in better transparency.

Technical bids are always opened in the presence of the bidders.


Clause 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.” Clause 15.2 : “If a Bidder, Preferred Bidder or Successful Bidder, is found by the State Government to have

In case the Bidder is a subsidiary company, then will such disqualification also apply to the holding company for a period of 5 years?

As per Law and Tender Document.



S. No.





directly or indirectly or through an agent, engaged or indulged in any Corrupt Practice, Fraudulent Practice such Bidder or Successful Bidder shall not be eligible to participate in any tender or Tender Document issued by the State Government during a period of 5 years from such date.”


Explanation to Clause 5(b) : “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 financial year ended immediately preceding the date of issuance of notice inviting tender. As per point (d) (iii) of Part B of Schedule I of the Tender Document: “In case of a company. statutory auditors of the Bidder (certificate

Whether Securities Premium can taken as a part of Free Reserves for the purpose of calculation of Net Worth of the Bidder.

The free reserves of a company will be computed as per Sub-section 43 of Section 2 of the Companies Act, 2013



S. No.





should clearly mention that it has been issued by the statutory auditor of the company, and the net worth stated therein is the sum of the paid up share capital and the free reserves, in terms of Explanation No 2 to the Schedule I of Auction Rules).”


Clause 11: Time Table: As per the time table, (process for grant of ML), the Max time (T2) given for submitting Performance Security and Mining Plan along with 10% (2nd instalment of Upfront payment) is for T1 + 2 years 6 months where T1 is the issuance of LOI by Odisha Govt. Post that Government will take 3 months (T+3 months) to approve and another 4 months (T2+4 months) for signing of MDPA

If we submit Mining Plan and Performance security along with 2nd installment before the scheduled timeline of T1+2 years 6 months, is the Govt also bound to do the approval and sign the MDPA within 3 and 4 months respectively or will it take max time mentioned in the timetable (T+3 years)?

As per Tender document

288. Tender The Performance 1. After exploration for 5 years, 1. Please refer to



S. No.





Document- Mining Lease

Security has to be renewed / adjusted every 5 years.

Performance security will be reduced by value of mineral dispatched or it can enhance also based on new exploration? 2. Which the Bid Security paid for an unsuccessful bid previously be adjusted with the subsequent bid placed by the same bidder or the funds would be required over & over again for all the auctions?

Rule 12 of Mineral (Auction) Rules, 2015. 2. Bid Security is required to be submitted for each mineral block separately


Performance Security The Bid Security paid for an unsuccessful bid previously be adjusted with the subsequent bid placed by the same bidder or the funds would be required over & over again for all the auctions?

Bid Security is required to be submitted for each mineral block separately


Holding Company Net worth

For calculation of net worth, whether the net worth of Holding Company and Subsidiary Company be added or it would be higher of either holding or subsidiary? In case of Holding Company, the new worth considered would be of standalone accounts or consolidated accounts?

Please refer to Schedule I of Mineral (Auction) Rules, 2015 will be considered for declaration of Preferred Bidder. The relevant portion is provided below. "In case an applicant is a subsidiary of another company incorporated in India, the net worth of such holding company



S. No.





may also be considered: Provided that, in such case, the applicant shall continue to be a subsidiary of such holding company until such time the applicant meets the aforementioned net worth threshold."


GST

Whether GST would be payable on the Revenue Share / Premium as the same is applicable on the Royalty payment currently?



The premium is payable on the despatches or production?

Since there is penalty on minimum production, what happens if the miner produces but can’t despatch? What will be the method of weighing the production?


293. General Queries as per current practice followed by Odisha mines for evacuation and

As per present rule, the Royalty on Crushed fines is charged at IBM price of Lumps.

What about the Final price /premium price? Will it be calculated on the IBM price of the Fines or on the IBM price of Lumps? Eg: Crushed Lumps production is 1,80,000 tons and Crushed Fines is 60,000 tons. IBM price of Fines is Rs 1800 PMT and Lumps is Rs 3800 PMT




S. No.





commercial sale of the minerals.

and final premium is 40%. Then what will be the calculation of Final price? Will it be, Option A: 60,000 X 40% X 1800? Or Option B: 60,000 X 40%X3800?

294. General Queries as per current practice followed by Odisha mines for evacuation and commercial sale of the minerals.

In case of Declared Mines, the final price is paid on IBM price of Fines or Lumps of highest grade?

On which price will the final price / premium be calculated i.e on the actual grade price or on the highest grade produced prices? Eg: attached. The actual production is 62% Fe. IBM price is Rs 1800 PMT for 62% Fe and Rs 2200 PMT for 65% Fe. The calculation of premium will be 40% of Rs 1800 or 40% of Rs 2200?


295. General Queries as per current practice followed by Odisha mines for evacuation and commercial sale of the minerals.

IBM Price calculation Please advise us the methodology of calculating the IBM prices of Fines and Lumps along with illustration / example for better understanding.

The prices are calculated based on the methodology adopted by IBM.

296. 12 (1) gg of MCR 2016

Closing Stock What will happen to the closing stock lying at the mines coming up for

As per Law



S. No.





auction? In case old lessees are allowed time for evacuation, then how the new lessee would start working on the mines

297. General Queries regarding auction

Key Approvals Whether transfer of Mining Lease will take place seamlessly and the key approvals like EC / MP / CTO/ FC shall be valid for new/ prospecting leases?

Obtaining necessary approvals under relevant laws are the responsibility of Preferred Bidder or Successful Bidder.


Cost for New Lessee What cost the new lessee has to pay to the outgoing lessee on account of:: 1. Closing Stock 2. EC / FC / MP / CTO / Other Statutory cost incurred by the old lessess 3. Railway siding at mines 4. Compensation for acquisition of private land made by the old lessee 5.Key Infrastructures like Office, Cantee, Quarters, Plant & Machinery etc



Stamp Duty / Registration Expenses

The mining department needs to provide the expenses required to be paid towards Stamp Duty, Registration Expenses, etc

The stamp duty on the Power of Attorney shall be payable in accordance with the provisions of the Indian Stamp Act, 1899 as applicable to the state of Odisha.



S. No.





300.

General Queries regarding auction

Railway Siding / Evacuation formula

In case the outgoing lessee has established private railway siding which originates from a point outside the lease area and terminates at a point inside the lease area, how the railway siding would be transferred seamlessly? Whether railway board needs to give afresh approval in such cases? What should be the basis of compensation to the old lessee in such cases?

As per relevant law. Any financial transaction between the bidder and the present lessee will be the responsibility of the Preferred/ Successful Bidder.

301. Tender Document for Auction of Jilling-Langalota Iron Ore Block

Eligibility b)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 shall continue to be a subsidiary of such holding company until such time the applicant meets the aforementioned net worth threshold.

For Example: There is a Company “A” in existence and incorporated in India prior to the date of issuance of NIT and has audited balance sheet of financial year 2018-19. Company “B” which is also incorporated in India, holds 100% shares of Company of “A”. Before submission of bid, Company “C” buys 49% shares of Company “A” and thus Company “A” becomes JV Company of Company “B” and Company “C”. The majority shares (51%) of Company “A” is still with Company “B” as on date of submission of Bid. Company “B” has sufficient Net worth as on March 31, 2019 to meet qualifying criteria as required for




S. No.





(2) 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 financial year ended immediately preceding the date of issuance of notice inviting tender. 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’

Jilling Langalota Iron Ore ML tender. Since, Company “A” doesn’t have sufficient Net worth to meet qualifying requirement for Jilling Langalota Iron Ore ML tender, it draws strength from its holding Company “B”. Please confirm whether as per the Tender conditions, Company “A” is eligible to participate in the tender on the basis of Net worth of Company “B”.


5.Eligibility b)Explanation In case an applicant is a subsidiary of another company incorporated

Can a successful bidder form a SPV to execute the project. Kindly confirm as per applicable laws.




S. No.





in India, the net worth of such holding company may also be considered: Provided that, in such case, the applicant shall continue to be a subsidiary of such holding company until such time the applicant meets the aforementioned net worth threshold.


1. Important information 1.1 All information provided in this Tender Document should be read together with the Act and the rules framed thereunder. In the event of a conflict between this Tender Document and the Act or the rules, the Act or the rules (as amended from time to time), as the case may be, shall prevail.

As per tender condition, bidder has to follow MMDR Act and rules framed thereunder. All the miners has to submit monthly and annual return as per MCDR 2017, wherein miners has to provide sale price inclusive of Royalty, DMF, NMET excluding Taxes/GST. IBM is computing average sale price on the basis monthly return. Since Royalty is calculated on IBM published sale price, it seems that Royalty is calculated on Base price + Royalty + DMF+ NMET i.e. cascading effect is there on Royalty + DMF+




S. No.





9.2. It is clarified that payment in accordance with the Final Price Offer shall be required to be paid monthly in addition to the payment of royalty or dead rent, as applicable. Royalty on Iron Ore as per MMDR Act: 15% of Average sale price on ad valorem basis. As per MCDR 2017: CHAPTER VI Notices and Returns 45. Monthly and annual returns. (8) In case of mining of minerals by the holder of a mining lease, the– (a) sale value is the gross amount payable by the purchaser as indicated in the sale invoice, where the sale transaction is on an arms’ length basis and the price is the sole

NMET resulting higher cash outflow by miners. To mitigate the above, it is requested to please consider Royalty on actual sale price. The same may be consider through additional condition. Precedence can be taken from Madhya Pradesh State government’s Bunder Diamond Project, wherein royalty is to paid on actual sale price and not on IBM sale price.



S. No.





consideration for the sale, excluding taxes, if any. Explanation.– For the purpose of computing sale value, no deduction from the gross amount shall be made in respect of royalty, payments to the District Mineral Foundation and payments to the National Mineral Exploration Trust.



I. As per tender condition, Successful Bidder has to pay stamp duty during execution of MDPA and Mining Lease. We understand that stamp duty shall be paid as per Indian Stamp (Odisha Amendment) Act. However the ongoing litigation regarding stamp duty calculation for mining lease as per Indian Stamp (Odisha Amendment) Act 2013 at Hon’ble High court - Odisha is sub judice. Since Jilling Langalota mine is under operation and it is expected that mining lease shall be executed in due




S. No.





course of time, please provide following information on stamp duty to estimate the project economics: • How much Stamp duty is to be paid during the execution of MDPA or Mining Lease • Methodology for calculation of Stamp Duty and Registration Fee as per applicable laws. II. Mining Lease shall be granted for a period of 50 yrs. Since the calculation of stamp duty is dependent on period of mining lease, the grant of Mining lease period less than 50 years should be at the discretion of the successful bidder particularly for the mines whose resources are very limited thus life of mine would be less than 50 years.


10.3. Execution of Mine Development and Production Agreement: The State Government and the Successful Bidder shall enter into the MDPA upon the Successful Bidder having obtained all consents,

Mining Lease of Jilling-Langalota and many other iron ore mines are about to expire on 31st March 2020. In order to avoid disruption in supply of Iron ore to Steel Industry, production from all the operating mine should be continuous even after expiry of Mining leases.




S. No.





approvals, permits, no-objections and the like as may be required under Applicable Law for commencement of mining operation.

All the existing clearances will be co-terminus with Mining leases due to which successful bidder has to take afresh approval/clearance. For mining project, grant of fresh Environment and forest clearance takes 2-3 years time resulting delay in start of production from mine. Therefore it is requested that, Successful bidder should be allowed to mine with existing clearance for the mine for atleast 3 years, meanwhile successful bidder will apply and take afresh approvals.


3. Introduction 3.5 The Bidders are expected to conduct due diligence regarding the land to be comprised in the mining lease and also familiarize 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

For operating mine, existing allottee has acquired land (private, Government and forest) and created fixed infrastructure. In order to start the mine by 1st April 2020, land and fixed infrastructure set-up by existing allottee needs to be transferred to successful bidder at earliest. Please provide the policy guidelines and assistance from Government of Odisha to transfer the land and fixed infrastructure from existing allottee. The precedence can be taken from




S. No.





Conservation Act, 1980, the Panchayats (Extension to the Scheduled Areas) Act, 1996, 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. At

Coal block auction in 2015, wherein Ministry of Coal/CMPDI has provided assistance for smooth transaction of assets from existing allottee to new allottee.




As per applicable laws

308. Tender Document for Auction of Jilling-Langalota

Clause 12.1 Upfront Payment The Upfront Payment paid by the Successful

Our understanding w.r.t upfront payment is that: until the upfront payment is fully adjusted against the monthly payment of percentage of value of mineral dispatch the

As per Law



S. No.





Iron Ore Block

Bidder shall be adjusted in full at the earliest against the amount payable in accordance with the percentage of Value of Mineral Despatched quoted as the Final Price Offer on commencement of production of mineral(s) as specified in MDPA.

successful bidder will not be required to make any payment. Kindly confirm.


Clause 11 Timetable Issuance of LOA 3rd Jan’2020 (T1) Submission of Performance Security and mining plan along with second installment (10%) of Upfront Payment by the Preferred Bidder to become Successful Bidder T2 (last date of submission is T1 + 2 years and 6 months) Mine Development Production Agreement (MDPA) to be executed between State Government &





S. No.





Successful Bidder upon obtaining all consents, approvals, permits, no-objections from various government agencies/departments required under applicable laws for commencement of mining operations. T2 + 4 months



Is there any possibility of simultaneous e-forward auction of the two blocks as multiple tender for Iron/Manganese ore have been issued by state government of Odisha. Participation with single registration/ DSC in both the blocks wouldn’t be possible



Minimum production is linked to % of production approved as per mining plan. Please advise course of action incase there is a cap on production imposed by State government and the capacity as per approved mining plan is more. Minimum production requirement




S. No.





shall be % of lower of the EC or approved mining plan or any cap in production imposed by State Government. Please clarify. Also provide applicable laws in this regard.

312. MDPA 6 Utilisation of Mineral The Successful Bidder shall utilise the Mineral strictly in compliance with Applicable Law, including the Act and the rules framed thereunder.

Whether the iron ore mined from this block can be exported? Is there any restriction on sale ore in domestic market? Many states have restriction on export of mineral. State Govt. had issued advisory earlier for sale of 50% production within the State. Please provide applicable laws in this regard. This Clarification is important as it will have help us in estimation of financial impact.



4. Introduction The Bidders are expected to conduct due diligence regarding the land to be comprised in the mining lease and also familiarize themselves with all Applicable Laws relating to acquisition of rights over such land to

Particulars of land 1) Whether the Government land will be given on 50 years lease? If so, what will be the rent & other terms? 2) Forest clearance is required for entire forest land w.r.t. block, however the existing allottee already paid NPV and other expenses w.r.t. same forest land. We understand that the successful bidder has not to pay the expenses again for the same




S. No.





be comprised in the mining lease including without limitation, the Act, the Forest Conservation Act, 1980, the Panchayats (Extension to the Scheduled Areas) Act, 1996, 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. At

forest land. Please confirm our understanding. Shall it be possible to execute lease separately for forest & non-forest land. 3) Will the Govt. of Odisha assist the successful bidder in acquisition of such land?



The force majeure events should include delay/denial of approval from concern government authority as timeline for development of the deposit is stringent and successful bidder has to bear huge initial investment over upfront amount, performance security and expenditure over initial development




S. No.





of the project. It is requested that to safe guard the interest of the bidder, it is requested that delay/ denial of the approvals/clearances from concern authority should be considered as force majeure events. Reference can be taken from the major Coal/Iron MDO Tender floated by esteemed PSUs such as NMDC tenders.







In case any new taxes imposed on mining activities or sale of Iron ore, we understand that it shall be covered in change of law and bidder shall not be liable to pay. Kindly confirm. Following text shall be read in clause 17.3 of MDPA. 17.3. Upon occurrence of an Event of




S. No.





Force Majeure, the Successful Bidder shall: (i)...... (ii)....... (iii) In the event of termination due to force majeure events, the balance upfront amount and Performance Security shall be returned to preferred bidder without any interest.


Annexure II: Format of Bid Security 4. This Guarantee shall be irrevocable and remain in full force for a period of 240 days from the Bid Due Date i.e. [Insert Date] inclusive of a claim period of 60 days or for such extended period as may be mutually agreed between the State Government and the Bidder, and agreed to by the Bank, and shall continue to be enforceable till all amounts under this

Please insert the underlined text, as per Bank requirement This Guarantee shall be irrevocable and remain in full force for a period of 240 days from the Bid Due Date i.e. [Insert Date] inclusive of a claim period of 60 days or for such extended period as may be mutually agreed between the State Government and the Bidder, and agreed to by the Bank, and shall continue to be enforceable till all amounts under this Guarantee have been paid or till such further extended period, whichever is earlier.




S. No.





Guarantee have been paid.



As per our Bank, the following clarification has been raised while issuing Bid Security for this Project: Please insert following paragraph after point 12. This Guarantee is subject to THE ICC UNIFORM RULES FOR DEMAND GUARANTEES (ICC PUBLICATION NO. 758) and shall be governed by and construed in all respects, in accordance with the laws of India



Annexure II: Format of Bid Security 13. Notwithstanding anything contained herein,

As per our Bank, the following clarification has been raised while issuing Bid Security for this Project: Please insert following paragraph after point 13. c. Thereafter, after all your rights under this guarantee shall be lapsed and we shall be released from all our liabilities hereunder irrespective of whether the guarantee in original is returned to us or not.


320. Tender Document for Auction of Jilling-Langalota


As per our Bank, the following clarification has been raised while issuing Performance Security for this Project: Please insert following paragraph in the format of




S. No.





Iron Ore Block

Performance Security after point 12. This Guarantee is subject to THE ICC UNIFORM RULES FOR DEMAND GUARANTEES (ICC PUBLICATION NO. 758) and shall be governed by and construed in all respects, in accordance with the laws of India.



As per our Bank, the following clarification has been raised while issuing Performance Security for this Project. Please insert following paragraph in the format of Performance Security after point 14. Thereafter, after all your rights under this guarantee shall be lapsed and we shall be released from all our liabilities hereunder irrespective of whether the guarantee in original is returned to us or not.



Bid Security Requesting your kind consent and amendment in the clause related to “Bank Guarantee” as we have received a confirmation from Bank that “Bank cannot issue bank guarantee payable at Bhubaneshwar. However, bank can issue guarantee operatable at Bhopal. “Hence we request you to make an amendment in clause “payable at Bhubaneshwar”




S. No.





to “either payable or operatable at Bhubaneshwar”.


4.2.1 Manner of Appropriation of the Performance security: In case of surrender of the entire area of the Mining Lease by the lessee- Entire Performance Security as per sub rule (3) of Rule 21 of Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016.





Request you to insert suggested points for legal clarity Dispute resolution/arbit ration process should be given in MDPA. Following clauses may be inserted 19.14 : Dispute resolution 19.14.1 Any dispute, difference or controversy of whatever nature howsoever arising under, or out of, or in relation, to this Agreement (including its interpretation) between the Parties, and so notified in writing by either Party to the other Party (the




S. No.





“Dispute”) shall, in the first instance, be attempted to be resolved amicably in accordance with the conciliation. 19.14.2 The Parties agree to use their best efforts for resolving all Disputes arising under or in respect of this Agreement promptly, equitably and in good faith, and further agree to provide each other with reasonable access during normal business hours to all non-privileged records, information and data pertaining to any Dispute.


Clause 4.3.1.6 - Manner of appropriation of the Performance Security - In case of surrender of the entire area of the Mining Lease by the lessee : Entire Performance Security as per sub rule (3) of Rule 21 of Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016.

We submit that if Lessee is required to surrender the area due to delay not attributable to Bidder’s default, in such circumstances performance security should not be forfeited. The suggested clause is as below: In case of surrender of the entire area of the Mining Lease by the lessee due to preferred Bidder's default - Entire Performance Security as per sub rule (3) of Rule 21 of Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016.




S. No.






9.2: The Successful Bidder shall obtain and maintain all Governmental Approvals required for conducting the mining operations at the Lease Area and performing its obligations under this Agreement.




SCHEDULE E - WARRANTIES 3. GENERAL (h) except as set forth in any Mining Lease, all rights and interests of the Successful Bidder in and to the Lease Area shall pass to and vest in the relevant Governmental Authority on the date of termination or expiry hereof, free and clear of all Encumbrances without any further act or deed on the part of the Successful Bidder or the Central Government

Following text shall be read in as: 3. GENERAL (h) except as set forth in any Mining Lease, all rights and interests of the Successful Bidder in and to the Lease Area shall pass to and vest in the relevant Governmental Authority on the date of termination or expiry hereof, free and clear of all Encumbrances without any further act or deed on the part of the Successful Bidder or the Central Government. In the event of termination of this Agreement, the Residential facilities and Fixed Infrastructure facilities developed by Successful Bidder shall be purchased by State Government at the written down value as per audited accounts of the Successful Bidder or the value assessed by




S. No.





mutually acceptable independent Government approved assessor whichever is lower. (The depreciation rate shall be as per applicable Companies Act).


4.1.2. The amount of Performance Security shall be reassessed every five years commencing from the date of issuance of the Performance Security i.e. [date], so that the amount of Performance Security corresponds to 0.5% of the reassessed Value of Estimated Resources including the value of any newly discovered mineral that may be included in the Mining Lease deed on its discovery.

Please confirm that the Performance security amount shall be revised downwards if the reassessed value of estimated resources reduces.



10.2. Declaration as a Successful Bidder: The Preferred Bidder shall be considered to be the “Successful Bidder” upon:

There may be a possibility that requisite clearance specifically forest clearance or clearances for the project may not be accorded by concern authority. It is requested that, such incidents shall be considered as force majeure conditions.




S. No.





b) payment of the second instalment of the Upfront Payment which is INR [Insert amount]; c) furnishing an irrevocable and unconditional Performance Security to the State Government from an Acceptable Bank and payable at Bhubaneswar, Odisha, pursuant to the Auction Rules 10.3. Execution of Mine Development and Production Agreement: The State Government and the Successful Bidder shall enter into the MDPA upon the Successful Bidder having obtained all consents, approvals, permits, no-objections and the like as may be required

In such cases, upfront amount and performance security paid by bidder shall be returned back to Bidder without any appropriation. The Force Majuere clause may be referred as below: 17. EVENT OF FORCE MAJEURE 17.1. Event of Force Majeure means any of the following events or circumstances or combination of the following events or circumstances which are beyond the reasonable control of the Successful Bidder, which could not have been prevented by Good Industry Practice or by the exercise of reasonable skill and care and which or any consequences of which, have a material and adverse effect upon the performance by the Successful Bidder of its obligations or enjoyment of its rights:............. (i)............ (vii) Delay or revocation of, or refusal to renew or grant without valid cause, any clearance, licence, permit, authorisation, no objection certificate, consent, approval or exemption required by the preferred



S. No.





under Applicable Law for commencement of mining operation.

Bidder to perform their respective obligations under this Agreement ; provided that such delay, modification, denial, refusal or revocation did not result from the preferred Bidder's inability or failure to comply with any condition relating to grant, maintenance or renewal of such clearance, licence, authorisation, no objection certificate, exemption, consent, approval or permit. 17.4. If an obligation is suspended by reason of an Event of Force Majeure ……………………………………………………… the Parties are negotiating the terms of any such revision. The Cost and loss sustained by either parties shall be borne by respective parties. 17.5 Relief for Unforeseen Events: Upon occurrence of an unforeseen event, situation or similar circumstances not contemplated or referred to in this Agreement, and which could not have been foreseen by a prudent and diligent person (the "Unforeseen Event"), any Party may by notice inform the other Party of the occurrence of such Unforeseen



S. No.





Event with the particulars thereof and its effects on the Project. Within 15 (fifteen) days of such notice, the Parties shall meet and make efforts in good faith to determine if such Unforeseen Event has occurred, and upon reaching agreement on occurrence thereof, the Parties shall in good faith determine the manner in which such Unforeseen Event shall be dealt with. 17.6 If NGT or any other Authority passes an order / directions which prevent the contractor to fulful its obligation under this contract and / or operations, then such event shall be treated as Force Majeure event. On occurrence of such event, Contractor shall be excused for performance of its obligations and neither party will compensate to other party.

330. Whether all the clearances (Environment, Forest, Mining Plan & any other) will be extended and for how long?

Obtaining necessary approvals under relevant laws are the responsibility of Preferred Bidder or Successful Bidder.

331. If Annual captive requirement of plant is much less than the current

As per provisions of the applicable law



S. No.





annual production of the mines but the bidder qualifies as per net worth criteria. Is there any minimum production and utilization requirement for the mine to avoid material scarcity in Industry?

prevalent at that time

332. For merchant mines, what is the minimum production criterion against the current annual production.


333. Modality of mining rights Merchant/ Captive to be transferred/ sold from the company being purchased in case there is an M&A or Joint Venture.

As per Law

334. Whether any possibility of SPV to bid for blocks with higher Net Worth or Net Worth of Group Company can be considered.


335. Whether bidder can qualify for all mines with same Net Worth or Net Worth will be adjusted/ reduced in proportion to his participation in each mine.


336. If reserves increase more than estimation, whether additional quantity will be allowed to be excavated or it will go for re auction.


337. If forest land in existing lease validity period has already been diverted, whether same land will be considered as non forest during

Obtaining necessary approvals under relevant laws are the responsibility of



S. No.





renewal or again forest diversion, CA land and aforestation will be required.

Preferred Bidder or Successful Bidder. The cost for the same needs to be borne by the Preferred/ Successful bidder.

338. If bidder disqualifies, for how long will it be blacklisted.

Please refer to Clause 13.7 and other relevant clauses of the Tender Document.

339. Royalty in most mines in Joda is calculated & paid on FE 65 IBM rate irrespective of actual FE grade produced in mine. Will % Revenue sharing & royalty be calculated as per existing practice. If yes, This will lead to heavy monetary drain for bidder.

The applicable payments should be made based on the sale prices published by IBM.

340. Auctioned mines is to be transferred/ sold from the company being purchased, or merchant mine bought in captive plant company and how to bifurcate cost centre of mines and plant operations.


341. It Annual captive requirement of plant is not the qty currently mined in a mine reserved for captive use, it will lead to hoarding, what is the provision to prevent the same. Example- SMC can qualify for K N Ram but can use only 3.5 lac tonne




S. No.





annually against current excavation of 34 lac tonne

342. If pellet plant established on mine, whether royalty and sharing shall be on beneficiated ore or not.


343. If material qty discovered is more than the qty mentioned in the mine, whether mine will go for re-auction after mentioned material is excavated.


344. How to transfer rights/ sell merchant mines/ captive mines. Whether Power of Attorney will be given or company to be sold

Please refer to Rule 23 of the Minerals (Other than Atomic and Hydrocarbons Energy Minerals) Concession Rules, 2016

345. Carrying capacity for EC clearance Obtaining necessary approvals under relevant laws are the responsibility of Preferred Bidder/ Successful Bidder.

346. Whether physical infrastructure of roads, building, fixed equipments, Colony will have to be separately paid for to the previous lessee




S. No.





347. Whether permission for sale of 25% on captive will be treated for previous lessee’s last yr of production or new lessee’s.


348. If ore is Beneficated at site, whether royalty will be charged on Fet of despatched ore or lower grade ore raised from mines.


349. If material discovered is more than reserves estimated, whether high grade material (>55 Fe) can be sold up to the estimated reserves limit. If beneficiation Plant is used inside or outside the mine to upgrade material of (<45 Fe), whether that will be counted in the total requirement.


350. If previous lessee doesn’t evacuate material, whether he will get time after mines lapse to evacuate. If he doesn’t whether new lessee can sell that material and will it be counted in its production.



Whether the existing permits & approvals will be transferred to the Successful Bidder?
