responses to bidders’ queries (no. 1) on model tender ... · responses to bidders’ queries_19th...

Responses to Bidders’ Queries_19th Feb 2016 P a g e 1 | 211

Responses to Bidders’ Queries (No. 1) on Model Tender Document and Mine Specific Tender Documents for Auctions of Category “C” Iron Ore Mines (Date 19 Feb 2016)

The replies/clarifications/responses shall be applicable to Model Tender Document (including MDPA) and all mine specific Tender Documents (including MDPA) issued pursuant to the Notice Inviting Tender issued by the Commissioner/Director, Department of Mines & Geology, Government of Karnataka on 22nd Dec 2015

S.No. Article/Clause/Page

No.

Comment/Views/ Suggestions Rationale Suggested text for

amendment, if any

Response

Force Majeure

1. Clause 17.1

It is expressly

clarified that an

Event of Force

Majeure affecting

End Use Plant shall

not constitute an

Event of Force

Majeure

hereunder.(Mine

Development and

Production

Agreement)

In case of end use plant getting

affected by Force Majeure, the

Successful Bidder should not be

penalized for breach of this

Agreement.

Please modify the

clause suitably.

Please refer the

Corrigendum/Addendum.

2. Clause 17

Event of Force

Majeure

It is expressly

clarified that an

a) The Category C mines are

being auction expressly for

captive consumption and no sale

of iron ore is allowed from such

mines. With such condition, this

clause is not justifiable. If plant of

Force Majeure

conditions which are

applicable to mines

should also be

applicable to the End

Use plant. If a force

It is expressly

clarified that an

event of Force

Majeure affecting

End Use Plant shall

not constitute and

a) Please refer the




No.


amendment, if any

Response

event of Force

Majeure affecting

End Use Plant shall

not constitute and

Event of Force

Majeure hereunder

Bidder is not under operation

because of Force Majeure

condition affecting plant, it cannot

consume the iron ore mined and

hence cannot meet Despatch

Requirements.

Hence, we request you to remove

the clause saying

“an event of Force Majeure

affecting End Use Plant shall not

constitute an Event of Force

Majeure hereunder

b) Further, there are several

events which are in the nature of

Force Majeure which should be

added under FM Clause. Such

events include the events of

change in law, any restrictions,

adverse court orders, delay and

denial of permission from any

authority or any event which

directly impact the business.

majeure condition

hampers production at

the End Use plant,

where will the

production from mine be

utilised? Therefore this

clause needs to be

revised.

If due to order of any

court the mine / end use

plant cannot be

operated, such even

shall be considered in

Force Majeure.

Further Bidder is

quoting its bid

considering existing law

and any change in law

impacting business

adversely should be

considered Force

Event of Force

Majeure hereunder

In addition to

existing Force

Majeure condition,

please include

following as Force

Majeure:

• Any Force Majeure event impacting operations of Plant of Successful Bidder

• Any order from court, authority

b) Suggestions at part b) are not

acceptable. There is no change in

MDPA.



No.


amendment, if any

Response

Majeure unless

consequence of such

change are discussed

between government

and bidder and an

amicable solution is

achieved.

or government or any such entity restricting operations of Plant or Mine.

• Any denial/cancellation of any permit/approval

• Any restriction imposed by Authority or any Government Agency or court impacting Successful Bidder’s operation

Change in Law

making business

more burdensome

for Bidder from this

Mine

3. Clause 17.1 of

MDPA: Force

Majeure

We note that clause 17.1

provides that an Event of Force

Majeure affecting End Use Plant

will not constitute an Event of

Force Majeure under the MDPA.

It may be useful to consider that

in the event of occurrence of a

Clarification required Clarification required Please refer the




No.


amendment, if any

Response

force majeure event at the End

Use Plant, there may be no

requirement of the mined mineral

leading to suspension of the

mining activity by the Successful

Bidder. Such suspension of

activity can trigger payment of

minimum guarantees or failure to

comply with other obligations by

the Successful Bidder under the

MDPA.

Stamp

Duty/Registration

Fees/Taxes

4. Tender Document

Clause

10.3 & 10.4

How much Stamp duty is to be

paid during the execution of

MDPA or ML

Should not be

charged at all

Clarifications regarding stamp

duty/registration charges for

MDPA/Mining Lease deed will be

provided subsequently but before

the last date of sale of Tender

Document.

5. Clause 10.4

Subsequent to

execution of the

MDPA, the

Successful Bidder

shall pay the third

1. Stamp Duty shall be

chargeable only on amount of

Royalty and not on Final Price

Offer. Is our understanding

correct?

2. Methodology for calculation of







No.


amendment, if any

Response

installment of the

Upfront Payment

which is INR

29,21,94,372 (Indian

Rupees Twenty nine

crores twenty one

lakhs ninety four

thousand three

hundred and seventy

two). Upon such

payment the State

Government shall

grant a mining lease

to the Successful

Bidder within a

period of 30 days

from the date of

payment. The date

of the

commencement of

the period for which

a mining lease is

granted shall be the

date on which a duly

executed mining

lease is

registered.(Tender

Document for Rama

Stamp Duty and Registration Fee

may please be shared.


Document.



No.


amendment, if any

Response

Rao Paol (Mining

Lease - 2621))

6. General What will be the percentage of

stamp duty?






Document.

7. Clause 10.4

Tender Document

As per Stamp Act, we understand

that the Mining Lease deed will

attract stamp duty. Kindly clarify

following:

• Will MDPA also attract any stamp duty? If yes, what will be the amount of such stamp duty on MDPA.

• What will be the value of stamp duty on the mining lease deed. Provide value and basis of calculation.

• Please identify and provide any other duty, tax, cess etc. payable by Bidder on signing of mining lease, MDPA and other approvals and clearances.

• Further clarify if the stamp duty be calculated for whole mining lease or life of mine

In case of coal auction,

stamp duty become

major issue of disputes

between the successful

Bidder and Tendering

authorities. Hence we

request you to clarify

the value of the stamp

duty on various

instruments to be

signed between

Government, Authorities

and Successful Bidder

to avoid any dispute at

later stage as well as for

better valuation.






Document.



No.


amendment, if any

Response

(in case of difference between the two).

• We request you to provide detailed calculations with illustrations to ascertain impact of Stamp Duty

Since lease deed is the

ultimate document, it

shall alone be subject to

stamp duty and no other

document, including

MDPA

8. To be executed on

stamp paper of

adequate value.

(Mine Development

and Production

Agreement)

What will be the stamp paper

value? Please clarify.






Document.

9. Stamp Duty How much stamp duty is payable

during execution of mining lease

Since there were lots of

controversies for stamp

duty calculation after

coal block auction.






Document.

10. Transfer of mining

Lease

Please advise us on procedure

to be followed for transfer of

Mining lease and

transfer/mutation of Land from

prior allottee to successful bidder

with applicable stamp duty and

registration charges, if any

Mining Lease will be granted for

50 years as per MMDR Act.

Statutory approvals are required

to be obtained by the Preferred

Bidder/Successful Bidder as per

the Applicable Law/ Judgment



No.


amendment, if any

Response






Document.

11. Tender Document

Clause

10.3 & 10.4

Applicable Stamp duty to be paid

for registration of Mining Lease

Deed






Document.

12. Tender Document

Clause

10.3 & 10.4

What should be the percentage

of stamp duty and of lease

validity?






Document.

13. Model Tender

document

Clause No: 10.3 &

10.4

How much Stamp duty has to be

paid during execution of MDPA or

ML. Whether Stamp Duty has to

be paid for 20 years or 50 years.

The calculation sheet may be

provided to plan our financial

obligations accordingly.






Document.



No.


amendment, if any

Response

Calculation of Stamp

Duty

14. Only the minimum royalty should

be levied on as per ton basis i.e.

cost of digging the material from

the mines plus transportation of

goods to stock yard,

crushing/sizing plus a 10% profit

for the public sector undertaking

or any private contractor,

whichever is lower, whereby such

iron ore can be distributed on a

mutual basis depending upon

their installed capacities of

sponge iron units.

Royalty, taxes, duties, fees,

charges and other amounts shall

be levied as per Applicable Law.

15. What is the % of Royalty to be

paid to government?

As per Applicable Law.

16. What is the % of FBT to be paid

to government?

As per Applicable Law

17. New Insertion

(suggested by

bidder)

Apart from Monthly payments as

per MDPA, stamp duty, royalties

and taxes etc. are applicable on

the Successful Bidder, we

request the Government to

As the bid shall be

decided based on

deductions applicable

as per current fiscal

rates. Any more

Royalty, taxes, duties, fees,

charges and other amounts shall

be levied as per Applicable Law.



No.


amendment, if any

Response

provide a ceiling of taxes/capping

on deductions for entire period of

mining lease

deductions in terms of

royalties etc. may result

in the unpredictable

fiscal scenarios and

may impact on reduced

returns.

Performance

Security/Bid Security

18. Clause 10.2(c)

furnishing the

Performance

Security pursuant to

the Auction Rules,

valid for the period

specified in the

MDPA, for an

amount equal to INR

36,52,42,965 (Indian

Rupees Thirty six

crores fifty two lakhs

forty two thousand

nine hundred and

sixty five). Pursuant

to sub-rule (1) of rule

12 of the Auction

Rules, the

Performance

1. Does this mean that at every

five years Value of Estimated

Resource will be determined for

balance mineral reserve in the

mine?

2. If new Value of Estimated

Resource is lower than the older

value then Bank Guarantee will

be substituted with another Bank

Guarantee of lower value i.e.

0.50% of new Value of estimated

resource.

Performance Security

should be provided

corresponding to the

value of balance

reserve only.

1. Clause 4.1.3 of the MDPA is

self-explanatory in this regard.

2. Clause 4.1.2 of the MDPA is

self-explanatory in this regard.



No.


amendment, if any

Response

Security shall be

adjusted every five

years so that it

continues to

correspond to 0.50%

of the reassessed

value of estimated

resources

determined in

accordance with the

Auction Rules. In

such case, bank

guarantee

constituting the

Performance

Security shall be

substituted with

another bank

guarantee of the

same value issued in

accordance with this

Clause 10.2, which

is for the revised

amount or if the

Performance

Security has been

provided through a

security deposit,



No.


amendment, if any

Response

additional amount

towards security

deposit shall be

provided (Tender

Document for Rama

Rao Paol (Mining

Lease - 2621))

19. Clause 4.1.5

The Performance

Security should

remain valid until the

expiry of the period

for which Mining

Lease (including

renewed Mining

Lease) has been

granted or will be

granted. (Mine

Development and

Production

Agreement)

Pursuant to clause 4.1.2 of Mine

Development and Production

Agreement, 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 Resources.

Hence, the validity of

Performance Security should by

only for five years and at the end

of every five year a new bank

guarantee should be submitted

for another five years based on

reassessed value of mineral

resource.

The Performance Security shall

be initially valid for a period of 5

(five) years and shall be renewed

successively for a period of five

years thereafter, until the expiry

of the period for which Mining

Lease has been granted.

Please refer the Corrigendum/

Addendum.



No.


amendment, if any

Response

20. 10.2 C

furnishing the

Performance


the Auction Rules,


specified in the

MDPA, for an

amount equal to INR

[amount in figures]

(Rupees [amount in

words]). Pursuant to

sub-rule (1) of rule

12 of the Auction

Rules, the

Performance

Security shall be

adjusted every five

years so that it

continues to

correspond to 0.50%

of the reassessed

value of estimated

resources

determined in

accordance with the

Auction Rules. In

such case, bank

The Performance Security BG is

supposed to be valid until the

expiry of the period for which

Mining Lease has been granted.

It is suggested that the validity of

Performance BG can be one year

and shall be renewed annually.









Addendum



No.


amendment, if any

Response

guarantee

constituting the

Performance

Security shall be

substituted with

another bank

guarantee of the



Clause 10.2, which

is for the revised

amount or if the

Performance

Security has been

provided through a

security deposit,

additional amount

towards security

deposit shall be

provided;

21. Clause 10.2 (Tender

Document): 10.2.

Declaration as a

Successful Bidder:

The Preferred Bidder

shall be considered

What will be the validity period of

Performance Guarantee?

Clarification required Clarification required The Performance Security shall







No.


amendment, if any

Response

to be the “Successful

Bidder” upon,-

(c) furnishing the

Performance


the Auction Rules,


specified in the

MDPA, for an

amount equal to INR

[amount in figures]

(Rupees [amount in

words]). Pursuant to

sub-rule (1) of rule

12 of the Auction

Rules, the

Performance

Security shall be

adjusted every five

years so that it

continues to

correspond to 0.50%

of the reassessed

value of estimated

resources

determined in

accordance with the

Auction Rules. In




Addendum.



No.


amendment, if any

Response

such case, bank

guarantee

constituting the

Performance

Security shall be

substituted with

another bank

guarantee of the



Clause 10.2, which

is for the revised

amount or if the

Performance

Security has been

provided through a

security deposit,

additional amount

towards security

deposit shall be

provided;

14.4. The Successful

Bidder’s Bid Security

will be returned,

without any interest,

upon furnishing of

the Performance

Security in



No.


amendment, if any

Response

accordance with the

provisions thereof.

22. Clause no 4.1.2 of

MDPA: The amount

of performance

security shall be

reassessed every

five years…

What would be the period of

Performance Guarantee?

Whether the performance

security to be taken for 5 years &

to be renewed with revised

amount if any based on the

reassessment

To bring greater clarity Performance

Guarantee will be

valid for 5 years and

to be renewed for

further five years

based on the

reassessment of the

mine









Addendum.

23. Clause 14.4 The

Successful Bidder’s

Bid Security will be

returned, without any

interest, upon

furnishing of the

Performance

Security in

accordance with the

provisions thereof.

(Tender Document

for Rama Rao Paol

(Mining Lease -

2621))

Pursuant to clause 11, stage II

activity will start after obtaining all

clearances/approvals for which

18 month of time period has been

specified. Further, submission of

Performance Security is also

listed as an activity at stage II

that means Performance Security

will be submitted after 18 months.

However, Bid Security has only

240 days validity. Please clarify.

It is clarified that the validity

period of the Bid Security shall

not be less than 510 days from

the Bid Due Date inclusive of a

claim period of 60 days.


Addendum.



No.


amendment, if any

Response

24. SCHEDULE E -

PRODUCTION AND

DESPATCH

REQUIREMENT

Performance security to the

extent of 25% will be invoked if

dispatches are more than 50%

and less than 75% of production

requirement. Whether 25% of

performance security will be

invoked irrespective of

dispatches achieved i.e. same

from 51% to 74%, or it will be

proportional to the short fall in

quantity w.r.t. 75%.

The Performance Security will not

be invoked if the actual

production in a financial year is at

least 50% of the Production

Requirement, as mentioned in the

table in Schedule E of MDPA. If

the actual production in a

financial year is lower than 50%,

25% of the Performance Security

shall be invoked (irrespective of

the level of production achieved

below 50%) in addition to the

Annual Payments that the

Successful Bidder is liable to pay

for the Minimum Annual Dispatch

Requirement.


Addendum.

25. General Please let us know the terms and

conditions under which

performance security can be

invoked.

Please refer Clause 4.3 of MDPA

and clause 12.2 of Tender

Document along with the

Corrigendum/ Addendum issued

in this regard.



No.


amendment, if any

Response

26. Tender document for

Rama Rao Paol (ML

2621)

14.4 “The

Successful Bidder’s

Bid Security will be

returned, without any

interest, upon

furnishing the

Performance

Security in

accordance with the

provisions thereof”

Discrepancy in time schedule –

need correction

As per schedule

envisaged, performance

security is payable

around 18 – 24 month

(along with II

installment), while the

bid security is valid only

for 240 days ( 8 months)

there is no use of

withholding the bid

security for successful

bidder


Addendum.

27. Tender Document

Clause 2.13

How much Performance security

amount is payable. (BG or DD)

Refer 2.13 of model

tender document.

Value of performance security is

mentioned in mine specific

Tender Documents. It is 0.5% of

the Value of Estimated

Resources in accordance with the

Mineral (Auction) Rules 2015.

Performance security means a

bank guarantee in the format as

provided in Schedule III of the

Mineral (Auction) Rules 2015 or a

non-interest bearing security

deposit to be provided pursuant



No.


amendment, if any

Response

to the Mineral (Auction) Rules,

2015.

28. Clause 14.4 Bid

Security

It is mentioned in clause 14.4 that

"...Bid Security will be returned ,

without any interest, upon

furnishing of the Performance

Security..." However the validity

of Bid Security is only 8 months

(240 days) whereas Performance

security to be provided after 18

months (after getting all statutory

approvals). So kindly check this

irregularity and clarify.

It is clarified that the validity

period of the Bid Security shall

not be less than 510 days from

the Bid Due Date inclusive of a

claim period of 60 days


Addendum.

29. Tender Document

Clause 14

Whether bid security can be

converted into performance

security or not.

No.

30. Clause 14.1

The Bidder shall

furnish as part of its

Technical Bid, a

security in the form

of a bank guarantee

payable at

Bengaluru by a

Scheduled Bank as

listed in the Second

Format of Bid Security provided

in Part C of Schedule I has no

provision to mention that the

bank guarantee is payable at

Bengaluru.

The format should

be suitably

amended.

Instructions for submission of the

Bid Security mandate that the Bid

Security must be payable at

Bengaluru. Please refer Clause C

(1) b) of Schedule I of the Tender

Document.



No.


amendment, if any

Response

Schedule of the

Reserve Bank of

India Act, 1934,

excluding those

listed under the

headings of Gramin

Banks, Urban

Cooperative Banks

and State Co-

operative Banks, in

favor of the State

Government in

substantially the

same format as

prescribed at Part C

of Schedule I

(Format of bid

security), and having

a validity period of

not less than 240

days from the Bid

Due Date, inclusive

of a claim period of

60 days, and may be

substituted with

another bank

guarantee of the




No.


amendment, if any

Response


Clause, which is

valid for an extended

period as may be

mutually agreed

between the

State Government

and the Bidder from

time to time. (Tender

Document for Rama

Rao Paol (Mining

Lease - 2621))

31. Tender Document,

Clause 14, Bid

Security

Acceptance of a Corporate

Guarantee or Letter of

undertaking in lieu of Bank

Guarantee for Bid Security, as

per the format and tenure

stipulated for BG

Corporate guarantee/ letter of

undertaking is not acceptable.

Please refer Clause 13.1.1 (b) of

the Tender Document.

32. Tender document Whether corporate guarantee

can be submitted in case of bank

guarantee for bid security till

auction process reaches to final

allotment level.

Corporate guarantee/ letter of

undertaking is not acceptable.





No.


amendment, if any

Response


Rama Rao Paol (ML

2621)

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”

Why is Govt holding Bid Security

for unspecified period?

Govt should return the

bid security within 7

days for unsuccessful

bidders.

State Government shall try to

return the bid security of

unsuccessful Bidders without any

interest as promptly as possible.


Rama Rao Paol (ML

2621)

14.2 The Bid

security shall be for

INR 36,52,42,965

Bid security needs downward

revision

The amount of bid

security is very high

compared mineral

auction in progress in

other states, downward

revision is requested.

Bid security amount shall be as

per provisions of the Tender

Document.

35. Schedule I (C ) (2)

Format of Bid

Security

We need Beneficiary's (State

Government of Karnataka) Bank

Account Details - Full Name,


Addendum.



No.


amendment, if any

Response

Address, IFSC Code and SWIFT

Code. This information has been

asked for by the BG issuing

bank.

36. Schedule I (C ) (2)

Format of Bid

Security

Address to be mentioned on the

Bank Guarantee


Addendum

37. Tender Document

Clause 13

Acceptance of a corporate

guarantee or letter of undertaking

in lieu of bank guarantee for Bid

Security as per the format and

tenure stipulated for BG be

accepted

Corporate guarantee/ letter of undertaking is not acceptable.



38. Tender Document

Clause 14

Method of calculation of Bid

security amount (DMD) to be

submitted in the form of Bank

Guarantee along with Technical

bid

As per provisions of the Tender

Document. Amount of bid security

has been mentioned in Mine

Specific Tender Document.

39. Tender Document

Clause 14

Please inform us what is the “BID

SECURITY AMOUNT” for each

mines so that we know whether

we should buy the bid document

or not?

Bid security amount is mentioned

in mine specific Tender

Document.



No.


amendment, if any

Response

40. Clause 8.B.(b)

(Tender

Document):The e-

auction process shall

be annulled if none

of the Qualified

Bidders submits a

Final price offer

In case we bid for mines more

than one, and all the bids

happens to be highest in the first

round, & in the second round no

one participates in the auction,

whether the default is treated

mines wise

Clarification required Clarification required Yes, Bid Security shall be

forfeited as per conditions of

Clause 14.6 e) of the Tender

Document.

41. Model Tender

Document

Clause No: 14.3

The bid security of

unsuccessful

Bidders will be

returned by the State

Government, without

any interest as

promptly as

possible.

As the value of the BG is of a

very high value with interest to be

paid to the bank and further the

deadlines for completion of each

aspect has already been fixed,

we request to have a specific

time period within which the bid

security will be returned to the

unsuccessful bidder, which

enables us to do our financial

planning accordingly.

The bid security of unsuccessful

Bidders will be returned by the

State Government, without any

interest as promptly as possible.

42. Model Tender

Document

As per the norms, we request

your good office to provide the

details of the bank and the IFSC


Addendum



No.


amendment, if any

Response

Clause 14 read with

Part C of Schedule I:

In order to establish

the Bank Guarantee,

as per the norms of

the bank, we require

the name of the

Bank and the IFSC

code to establish the

Bank Guarantee.

code of the branch for opening

the bank guarantee.

Clearances/Timeline

s

43. 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

Few clearances/permission for

commencement of mining

operations can be obtained only

after the execution of Mining

Lease e.g. DGMS permissions.

Further, pursuant to the tender

document, MDPA is predecessor

to the mining lease. Hence, it will

not be possible for the Successful

bidder to obtain all consents,

approvals, permits, no-objections

for commencement of mining

Clause 10.3 should

be suitably

amended.

Clearances and approvals to be

obtained as per Applicable Law.



No.


amendment, if any

Response

Applicable Law for

commencement of

mining operations.

(Tender Document

for Rama Rao Paol

(Mining Lease -

2621))

operation before MDPA, as

required under this clause.

44. Clause 10.3


shall obtain such

clearances/approval

s within 18 months

from the date of

letter of intent issued

by the State

Government.(Tender

Document for Rama

Rao Paol (Mining

Lease - 2621))

If the Preferred Bidder is unable to

obtain all clearances/approvals

within 18 months form the date of

letter of intent, will this period be

extended?

2. If not, how such situation will

be dealt with?

Please refer the


45. Clause 11

Time Table –

Stage II after

Preferred Bidder

obtains all necessary

clearances/approval

s from various

government

The Timeline in clause 11

suggest that the Preferred Bidder

will be declared as Successful

Bidder only after obtaining all

necessary clearances. Whereas,

clause 10.2 (Declaration as a

Successful Bidder) does not set

any prerequisite of obtaining all

To avoid inconsistency

in the Tender

Document.

A Preferred Bidder becomes a

Successful Bidder upon

compliance with clause 10.2 (a)

to (f) of the Tender Document.

The Preferred Bidder/Successful

Bidder has to obtain all necessary

clearances/ approvals. The

signing of MDPA requires the



No.


amendment, if any

Response

agencies/department

s. Such

clearances/approval

s shall be obtained

within 18 (eighteen)

months from the

date of letter of

intent issued by the

State Government.

1. Submission of

Performance

Security and mining

plan along with

second installment

(10%) of Upfront

Payment by the

Preferred Bidder to

become Successful

Bidder - T1

2. Issuance of order

by State

Government

acknowledging as

the Successful

Bidder - T1 + 10

3. Mine

Development

Production

clearances for declaration as

Successful Bidder. Please

Clarify.

Preferred Bidder to become a

Successful Bidder as well as all

having obtained all the necessary

clearances/ approvals.

Please refer the




No.


amendment, if any

Response

Agreement (MDPA)

to be executed

between State

Government &

Successful Bidder

after payment of

third installment

(80%) of Upfront

Payment; mining

lease to be executed

by State

Government.

Successful Bidder to

become holder of

mining lease. - T1 +

20(Tender

Document for Rama

Rao Paol (Mining

Lease - 2621))

46. Tender Document

Clause 10.3

With regard to this provision on

transfer of clearances and

approvals, kindly clarify the

following:

A. All clearances are being transferred to the successful bidder. However the tender is silent on the tenure/validity of such clearances. Further,

We understand that the

co-ordinates of FC

clearance and revised

ML boundary are

different. The difference

in the areas mentioned

in FC and ML need to

be corroborated and

A. Such transfer shall be as per

Applicable Law/Judgment.



No.


amendment, if any

Response

Existing clearances for various mines are either valid for few more years or lapsed already in some cases. Kindly confirm that while transfer of clearances, the validity would be extended till the Mining Lease period.

B. Kindly list down all the clearances which would be transferred for each asset. The process of transfer should be clearly spelt out along with modalities and time frame to avoid any confusion later on.

C. In case of several mines, we observe difference between areas for which FC is granted and Mining Lease area. In such cases, whether the necessary corrections would be made or not. It should be noted that if discrepancies are not removed, it can reduce mineable resources as well as lead to dispute.

D. We are providing details of few of the assets where we understand FC and ML areas are different:

1. TML (ML No. 2365) ML area is 130.53 ha while FC is for 125.58 ha;

should be aligned to

each other.

We request any such

ambiguity to be

addressed before

auctions to evaluate

assets properly.

Further given that

government is already

committing that all the

clearances would be

transferred in the name

of new lessee,

modalities & timeframe

should be clarified that

is for all clearances.

Government may also

issue common order of

transfer of all

clearances to avoid

hassle of process and

expedite reopening of

mine. Further since the

clearances are being

transferred to new

lessee, it is important

that clearances are

B. The copies of the existing

statutory clearances if available,

have been provided with mine

specific Tender Documents. Mine

specific Tender Document need

to be purchased. Any transfer of

existing statutory clearances shall

be as per Applicable

Law/Judgment

C. & D. The Preferred

Bidder/Successful Bidder has to

obtain necessary statutory

clearances/ approvals for

difference areas wherever

applicable.



No.


amendment, if any

Response

2. VS Lad (ML No. 2290) ML is for 100.54 ha while FC is for 120.137 ha.

3. LMC (ML No. 2487) ML is for 86.12 ha while FC is for 105.22 ha

4. M. Srinivaslu (ML No. 2631) ML is for 75.14 ha while the FC is for 74.86 ha

5. TML (ML No 2366) ML is for 33.21 ha while FC is for 47.66 ha

awarded for whole life of

project to start afresh.

47. Clause 10.3 MDPA The Preferred Bidder is

supposed to obtain all the

clearances within 18 months

form signing of LOI. 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) shall be the sufficient

documentary evidence for

submitting applications and

obtaining clearances from

authorities.

Yes. Letter of Intent (LOI) will be

the document based on which the

Preferred Bidder/Successful

Bidder shall proceed to apply for

obtaining all necessary

clearances/approvals.



No.


amendment, if any

Response

48. Clause 10.3

Execution of MDPA

Bidder can only take onus of

undertaking activities required

prior to application for clearances

and submit clearances however

grant of clearances is in the

hands of various authorities.

Thus Bidder cannot be made

liable for obtaining clearances

within 18 months.

We understand that in case the

approvals get delayed beyond 18

months the State Government

shall provide extension for that

delayed period. Please confirm

this understanding.

In many of the cases

projects get delayed

due to delay in

approvals and

permission without any

default on behalf of

mining company.

Government of

Karnataka will make

all efforts to approve

all such applications

within stipulated

timeline

In case the

clearances could not

be transferred/

granted to the

preferred Bidder

within 18 months the

time for obtaining

clearances shall be

extended

appropriately.

Please refer the


49. New Insertion

(suggested by

bidders)

As the Bidders need to obtain

various approvals and

clearances before

commencement of mining

operations. Also, as per

Supreme Court Guidelines these

will be transferred to Successful

Bidder, We suggest that a nodal

agency can be appointed by the

State Government of Karnataka

The appointment of

Nodal Agency will

simplify the process for

Successful Bidder and

significantly reduce the

time and efforts. Similar

provision was there in

case of coal block

auction wherein the

Nominated Authority

expedite the transfer of

Clearances shall be transferred

to/obtained by the Preferred

Bidder/Successful Bidder, as per

Applicable Law/ Judgment.



No.


amendment, if any

Response

to expedite these approvals and

clearances.

all Statutory clearances

including Environment

and Forest from Earlier

Allocate to new Allocate

in timely manner.


Rama Rao Paol (ML

2621)

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 operations.


shall obtain such

clearances/approval

s within 18 months

What will happen if these

clearances are not done within

the schedule where delays are

not on part of successful bidder

for reasons beyond control of

successful bidder

In case of Rama Rao

Paol mine this is simply

not possible since FC is

required which takes in

excess of 18 months for

final approval

Please refer the




No.


amendment, if any

Response

from the date of


by the State

Government.

51. 10.3 Para 2 - In its

Judgement, the

Supreme Court has

directed that

"existing statutory

approval/ clearances

in favour of the

lessee of the

erstwhile Category C

mining leases will be

transferred in favour

of the new lessees".

In its Judgement, the

Supreme Court has

further directed that

"the concerned

authority will take

expeditious action

for the grant of the

statutory approvals

such as the

environmental

clearance and

The concerned authority means

various concerned departments

like Forest, DMG etc or a

separate nodal officer/agency for

redressal of grievances

As such transfer of

existing clearances is

happening first time as

per the direction of

Hon'ble Supreme Court

so there will be lot of

issues while

implementation. For

better clarity and

directions to related

case workers, officers in

various departments

appointment of nodal

officer is must.

As per Hon'ble

Supreme Court

direction all the

existing clearances

has to be

transferred to

successful bidder,

hence it is

suggested to

nominate one nodal

officer in GoK at

senior position to

co-ordinate for

smooth transition of

existing clearances







No.


amendment, if any

Response

approval / TWP

under the Forest

(Conservation Act),

1980".

52. New Clause Suitable clause to be inserted to

exempt successful bidders from

any penalty for the delay in

operationalizing the mine, due to

delay beyond control of the

successful bidder like delay in

getting approvals , clearances

etc.

Please refer the


53. Clause 10.3

Execution of Mine

Development &

Production

Agreement:

“existing statutory

approvals /

clearances in favour

of the lessee of the

erstwhile Category C

mining lease will be


of the new lessees”

(Information

In certain mining lease the area

of FC clearance defers from the

area of ML. Under such cases

how the FC shall be transferred?

TML (ML No. 2365) ML area is

130.53 ha while FC is for 125.58

ha;

VS Lad (ML No. 2290) ML is for


ha.

LMC (ML No. 2487) ML is for


ha

M. Srinivaslu (ML No. 2631) ML

The difference in the

two areas – FC and ML

needs be corroborated.

Obviously the

difference in the

areas of FC and ML

has arisen because

of revised ML

boundary after CEC

survey.

Even the co-

ordinates of FC

clearance and

revised ML

boundary are also

different.

Please clarify under


Bidder has to obtain necessary

statutory clearances/approvals for


applicable.



No.


amendment, if any

Response

Memorandum of 11

mines + Model

Tender Document)

is for 75.14 ha while the FC is for

74.86 ha

TML (ML No 2366) ML is for

33.21 ha while FC is for 47.66 ha

such cases would

FC be automatically

get transferred in

the name of

successful bidder.

54. Tender Document

Clause 10.3

Statutory Clearances : As per the

Hon'ble Supreme Court order

and the tender document, there

are many 'C' category Iron Ore

Mining Leases for which the

statutory clearances like mining

leases, forest clearances ,

environmental clearances are

valid and to be transferred in the

name of successful bidder.

However, there is no clarity on

the agency and the time frame by

which these statutory clearances

will be transferred to the

successful bidder.





55. Tender Document

Clause 11

The time frame given for

obtaining of the statutory

clearances is 18 months from the

date of letter of intent. It is

requested in the interest of both

the bidder and the government ,

simplified Single Window

Please refer the








No.


amendment, if any

Response

Mechanism may be set up so that

all the required clearances can

be expedited through the same.

56. Tender Document

Clause 10.3, Clause

11 and MDPA

Clause 10,

a) In the tender document, it is

mentioned that after obtaining all

the statutory clearances and

mining plan approval the second

installment payment is to be

made. The clarification is sought

with respect to the approval of

R&R plan and the approval of

mining plan as it is not clear

whether R&R approval is to be _

obtained first or the mining plan

approval is to be obtained first. It

is also not clear the annual

minimum production requirement

will it be arrived at based on R&R

plan or Mining plan.

b) In the tender document on the

statutory clearances the details

for forest clearances and EC

clearances are given with respect

to the date of notification.

However, no details / documents

available so as to clarify the date

a) Please refer the clarifications

under section “R&R Plan/Mining

Plan” of this document pertaining

to responses to Bidders’ queries..

b) The copies of the existing

statutory clearances, as available,

have been provided with mine

specific Tender Documents. Mine

specific Tender Document need

to be purchased.



No.


amendment, if any

Response

of validity/ expiry of the statutory

clearances.

57. Transfer of already

available statutory

approvals:

Kindly explain how the transfer of

these approvals from earlier

company to successful bidder will

happen.





58. Except two or three leases, all

the leases are expired where

there leases will be extended

upto 50 years or the bidders have

to obtain fresh clearances.

Mining Lease will be given for 50

years as per MMDR Act.

Statutory approvals are required

to be obtained by the Preferred

Bidder/Successful Bidder as per

the Applicable Law/ Judgment.

59. Part C

Forest Land With

Status (Information

Memorandum

Nidhi Mining Co

(Mining Lease

2433)): Forest land

with status – 29.49

ha

We note that the Forest

Clearance dated FEE 194 FFM

2006 dated May 28, 2007 is with

respect to an area of 31.835 ha.

Please confirm whether

this forest clearance will

have to be amended in

light of the difference in

the status of forest land

mentioned in the IM

Clarifications

required





applicable as per applicable law.



No.


amendment, if any

Response

60. Part B, point no. 1 &

3 (Information

Memorandum for

Hothur Trading,

Mining Lease 2313):

Area for Forest

Clearance and

Environment

Clearance

Information Memorandum, Part B

provides that the Forest

Clearance dated 21.09.2000 is

for an area aggregating to 32.38

Ha. The Information

Memorandum specifies the

Mineral block area as 21.61 Ha.

However, on perusal of the

Environment clearance dated

06.07.2004, and the Forest

clearance dated 21.09.2000, we

understand that the clearance is

granted for an area aggregating

to 21.11 Ha.

It will be useful to

confirm whether the

existing environment

and forest clearance will

need to be amended to

factor the enhanced

area of 0.50 Ha in

addition to transferring

the environment/forest

clearance in favour of

the Successful Bidder

and extend the validity

of the same.

Clarification required The Preferred Bidder/Successful





61. Part A, point No. 2

(Information

Memorandum for

Lakshminarayan

Mining Company

(ML No. 2487)):

Total area in

Hectares

We note that the total area in

hectares mentioned in the

Information Memorandum is

86.12 ha. However, we note that

the forest clearance dated

7.07.2003 and the environmental

clearance dated 21.03.2007 is

with respect to mining area of

105.22 ha


confirm whether the


clearance and forest

clearance will need to

be amended to factor

the reduced mining

lease area mentioned in

the Information

Memorandum in




Clarifications

required






If forest clearance/ environment

clearance area is more than

mining lease area as fixed by

Hon’ble Supreme Court then


Bidder shall get the forest

clearance/approvals amended to

tally with the mining lease area.



No.


amendment, if any

Response



of the same

62. Part B, point No. 1

(Information

Memorandum for

Nidhi Mining

Company (ML No.

2433)): Forest

clearance for leased

area

We note that the total area in

hectares mentioned in the

Information Memorandum is

29.49 ha. However, we note that

the Govt of Karnataka

proceedings dated dated

28.05.2007 granting forest

clearance is with respect to

mining area of 31.835 ha


confirm whether the


clearance and forest



the reduced mining

lease area mentioned in

the Information

Memorandum in






of the same

Clarifications

required






If forest clearance/ environment

clearance area is more than

mining lease area as fixed by

Hon’ble Supreme Court then


Bidder shall get the forest

clearance/ environment clearance

/ approvals amended to tally with

the mining lease area.

63. Part B, point no. 1

(Information

memorandum

for Karthikeyas

Manganese (Mining

Lease No. 2559):

Mining Quantity for

Under Part A of the Information

Memorandum for Karthikeyas

Manganese ML No. 259 we note

that the Environmental Clearance

dated 01.03.2007 has been

issued for 0.319 Million Metric

Tonnes per annum whereas the

Total Geological Resources of


confirm whether the




the enhanced capacity

of total geological

resources mentioned in

Clarifications

required




Applicable Law/ Judgment. It will

be the responsibility of the

Preferred Bidder to get the R&R

Plan and Mining Plan prepared

(in this regard responses



No.


amendment, if any

Response

Environment

Clearance

Iron Ore mentioned in Part A is

28.472 Million Metric Tonnes.

the Information

Memorandum in






of the same

mentioned in section on R&R

plan/Mining Plan of this document

pertaining to responses to

Bidders’ queries. may be referred.

Further, it will be the responsibility

of the Preferred

Bidder/Successful Bidder to get

any amendments done/ additional

clearances obtained that will be

required based on the R&R Plan

and Mining Plan.

64. Clause 10.3

Execution of the

Mine Development

and Production

Agreement (Tender

Document): The

Preferred Bidder

shall obtain such

clearances/approval

s within 18 months

from the date of


by the State

Government.

In the event the Preferred Bidder

is not able to procure the

clearances and approvals within

the said timeline of 18 months

subsequent to which the

Preferred Bidder is unable to

enter into the MDPA, please

clarify whether the following

payments would be refunded to

the Preferred Bidder:

- First Instalment of the Upfront

Payment;

- Second Instalment of the

Clarifications required Clarifications

required

Please refer the


On failure to sign MDPA the

upfront and other payments as

per clause 10.2 e) & f) of the

Tender Document shall not be

refunded and Bid Security/

Performance Security shall be

appropriated as the case may be.



No.


amendment, if any

Response

Upfront Payment, and

- Bid Security

65. clause 10.3 (Tender

Document): Stage II

after Preferred

Bidder obtains all

necessary

clearances/approval

s from various

government

agencies/department

s. Such

clearances/approval

s shall be obtained


months from the

date of letter of


State Government.

Is there going to be any penalty

on the part of Preferred owner in

case it fails to achieve T1 within

18 months from LOI.



66. clause 10.3 (Tender

Document): Stage II

after Preferred

Bidder obtains all

necessary

clearances/approval

s from various

government

In case of any unforseen delays

happening between Stage I and II

for obtaining any necessary

clearances/ approvals, can the

time period for Stage II be

extended. If it can be extended,

please specify the procedures to

be followed for seeking the





No.


amendment, if any

Response

agencies/department

s. Such

clearances/approval

s shall be obtained


months from the

date of letter of


State Government.

extension of time for taking

necessary approvals

67. Model Tender

Document

Clause 4.1 (iv):

List of existing

Statutory Approvals/

clearances in

respect of the

Concession Area

and expected to be


of the Successful

Bidder

Whether the existing Statutory

Approvals will be transferred in

favour of the Successful Bidder

for the period of 50 years i.e.,

Mining Lease period or only upto

the validity of that particular

statutory approval.



Bidder/ Successful Bidder, as per


68. Clause 2.3.6

No record is

In absence of record of DGMS

approval, whether the successful

Yes. The Preferred

Bidder/Successful Bidder needs



No.


amendment, if any

Response

available regarding

DGMS permission

for carrying out deep

hole blasting.

(Provisional R&R

Plan –

Lakshminarayan

Mine)

bidder needs to obtain the fresh

approval?

to obtain any such fresh approval

that’s required for developing and

operating the mine.

69. Clause no. 2.1 of

R&R Plan

Mining lease period validity is

upto 20-05-2023 for

Lakshminarayana mining co.,

whether present mining lease

period will be for 50 or 20 years

The applicable mining lease

period shall be as per the MMDR

Act, which is 50 years.

70. Clause no. 2.9.2 of

R&R Plan

Lakshminarayana

Mining Co.

Haulage road ways in forest area

outside the lease is not known

for utilization of roads /

permission from forest

departments.

Any related approvals/ clearances

have to be obtained as per

Applicable Law by the Preferred

Bidder/Successful Bidder.

71. Clause no. 2.11 of

R&R Plan of

Lakshminarayana

Mining Co.

Common boundary workings

between Chowgule – ML No. –

2546 & Aswathnarayana Singh-

ML No. 2531 is to be obtained

from DGMS, Forest

Departments. Permission should

be cleared in fast track.

Any related approvals/ clearances

have to be obtained as per

Applicable Law by the Preferred




No.


amendment, if any

Response

72. Forest clearance for

leased area:

F.No:8-39/2003-FC

issued on

07/08.07.2003 by

MoEF (FC division)

Government of India

for 105.22 Ha.

(Information

Memorandum/ Mine

Block Summary)

Validity of FC is to be mentioned Mining Lease cancelled

by GOK on 12.09.2013

and FC is co-terminus

with mining lease as per

clearance copy.

ADD: The FC would

be valid upto 20

years from the date

of issue.

The existing FC wherever

available has been provided as

part of mine specific Tender

Document. The validity of Forest

Clearance shall be as per

Applicable Law.

73. Forest clearance for

leased area:

F.No:8-39/2003-FC

issued on

07/08.07.2003 by

MoEF (FC division)

Government of India

(Information

Memorandum/ Mine

Block Summary)

Approach Roads to Mine to be

included in FC. And change in

Area & Boundaries.

Approach Roads to

Mine, permission of

usage from forest

department in case of

forest land. After CEC

survey the area and

boundaries have

changed w.r.t. Existing

Forest Clearance.

ADD: The FC would

be valid for the

changed boundaries

and area including

approach roads to

mine area.

Forest Clearance for approach

roads up to mining lease

boundary, if any, required shall

also to be obtained by the

Preferred Bidder/ Successful

Bidder as per Applicable Law.

Mining Lease area shall be as per

the boundaries approved by the

Hon’ble Supreme Court. The

boundary pillars have been

constructed as per the

boundaries approved by the

Hon’ble Supreme Court and Total

Station & DGPS readings of

these boundary pillars have been

provided.



No.


amendment, if any

Response

74. Where ever approach road to the

auctioned mining leases are with

private land owners, in such

cases Government intervention

mainly help of District Collector of

that particular district is required

for grant of approach road

Unless the approach

road to the lease area is

granted to the

successful bidder,

commencement of mine

operation is not

possible.

The Preferred Bidder/ Successful

Bidder shall obtain the necessary

clearances/ approvals as per

Applicable Law.

75. Tender Document

Clause 10 (3)

Execution of Mine

Development and

Production

Agreement

To get statutory approvals, if any

Single window clearance

committee will be formed by the

government?

Clarification required Clearances shall be obtained by

the Preferred Bidder/Successful

Bidder, as per Applicable Law/

Judgment.

76. Tender Document

Clause

10.3

If successful Bidder is unable to

obtain all statutory approvals

within 18 months allowed as per

tender document then whether

18 months period allowed for

commencing production will be

increased

Single window

clearance concept

to be implemented

Please refer the


77. Part B1 - Forest

Clearance (Schedule

V

Information

Memorandum –

Please provide copy of forest

clearance

The same is available with the

mine specific Tender Document.



No.


amendment, if any

Response

Lakshminarayan

Mine)

78. Part B3 -

Environmental

Clearance (Schedule

V

Information

Memorandum –

Lakshminarayan

Mine & Rama Rao

Paol Mine)

Please provide copy of

environmental clearance

The same is available with the


79. General Whether EC and FC transferred

to successful bidder will be co

terminus with the new lease

period of 50 years?

Such transfer shall be as per

Applicable Law/Judgment.

80. Approach Roads to Mine,

permission from forest

department in case of forest land.

Any related approvals/clearances

have to be obtained by the


Bidder as per Applicable Law.

81. Model Tender

Document

As Clause No: 10.4 and Clause

No: 11 are contradicting each

other, we require clarification on

whether after execution of MDPA,

The Successful Bidder has to pay

the third instalment after

execution of MDPA.



No.


amendment, if any

Response

Clause No: 10.4

Existing Provision –

On execution of

MDPA, successful

bidder has to pay

third instalment

Clause No: 11

MDPA to be

executed between

State Government &

successful bidder

after payment of

third instalment

the successful bidder has to pay

the third instalment or after

paying third instalment, MDPA

will be executed.


Addendum.

82. Tender Document

Clause 10.3

Forest clearance is to be

obtained, for fresh/renewal

whether the payments like NPV,

afforestation charges, lease rent,

supervision charges, safety zone

charges is to be paid or not.

All the applicable

charges/expenses required either

for renewal or for obtaining fresh

clearances/ approvals need to be

paid by the Preferred


Exit Clause



No.


amendment, if any

Response

83. Tender Document Tender document does not

mention anything about exit

clause or surrendering of mine

after completion of 20 years, can

this be defined in tender

document.

The Mining Lease will be for 50

years as per MMDR Act. Any

surrender of the lease shall be as

per Applicable Law.

84. Procedure of

Surrender of mine

(Tender Document/

MDPA)

Nothing is mentioned about

process of surrendering of mine

after lease period is over or

completion before 20 years?

Pl consider to add

this suitably

Any surrender of the mining lease

shall be as per Applicable Law.

85. General

Whether successful bidder is

absolved from paying 50% of

minimum guaranteed amount

after the minable reserves is

exhausted before expiry of

mining lease?

The payments pertaining to the

Minimum Annual Despatch

Requirement is based on annual

production requirement as per the

R&R Plan.

Any surrender of the mining lease


86. New Clause to be

inserted (suggested

by Bidder)

a) An “Exit Clause” need be

inserted that in case of exhaustion

of mineral in the mining lease area

or

The geological

resources as estimated

by MECL are grossly

inflated and

overestimated. The bulk

density used is 3.85

Exit Cause:

Upon exhaustion of

ore from the mine,

the Successful

Bidder can close the

a) Any surrender of the mining

lease shall be as per Applicable

Law



No.


amendment, if any

Response

b) the quality of iron ore dropping

below the threshold limit of 45%,

the miner could abandon the

mine without attracting any

penalty

while this is 3.40-3.50 in

actual.

Also the estimation of

grade at 45% cut-off is

erroneously

composited. During

mining, in any one year,

if the average grade

falls below 45% it is not

economical to mine.

mine as per

approved Mine

Closure Plan. In

such event, Bidder

shall not be obliged

to pay any Monthly

Payment or Annual

Payment or Penalty

whether or not

Mining Lease has

lapsed and MDPA

term is completed.

Further,

Government will

return its

Performance

Security within 30

days of such closer

after inspection of

mine.

b) It is a business risk, which

needs to be assessed by the

bidder. Please refer Clause 1.3 of



Rama Rao Paol (ML

2621)

10.3 Execution of

Mine Development &

Production

Agreement

In case successful bidder has to

surrender the mine during

statutory clearance stage -- what

is the procedure?

Bid security/Performance security

shall be forfeited as per terms

and conditions of the Tender

Document. In addition any

payment made such as Upfront

Payment and payments made as

per clause 10.2 e) & f) of the



No.


amendment, if any

Response

Tender Document shall not be

refunded.

88. Tender

Document/MDPA

Nowhere in the Tender

document, it is mentioned that if

the minable resources exhaust,

then whether the successful

bidder is allowed to surrender the

lease as per applicable laws.

As per the new MMDR

Act Lease is to be

granted for 50 years but

to decide the capacity

the total reserves is

divided with 20years. As

the area is fully explored

by MECL and also in

case of further

exploration if the

reserve is exhausted in

20 years then , the

lessee should be

allowed to surrender the

lease as per applicable

provisions in the

existing laws.

A clause may be

inserted as-

"if the minable

resources exhaust,

then the successful

bidder should be

allowed to surrender

the lease as per

applicable

provisions in the

existing laws."

Any surrender of mining lease


89. Exit clause: In case resources

and grade found in ground are

less compared to the numbers

projected in Tender

Document/Information

Memorandum

It is a business risk, which needs

to be assessed by the bidder.

Please refer Clause 1.3 of the

Tender Document.



No.


amendment, if any

Response

90. New Clause to be

inserted (Mine

Development &

Production

Agreement)

a) An “Exit Clause” need be

inserted that in case of

exhaustion of mineral in the

mining lease area or

b) the quality of iron ore dropping

below the threshold limit of 45%,

the miner could abandon the

mine without attracting any

penalty

The geological

resources as estimated

by MECL are grossly

inflated and

overestimated. The bulk

density used is 3.85

while this is 3.40-3.50.

Also the estimation of

grade at 45% cut-off is

erroneously

composited. During

mining, in any one year,

if the average grade

falls below 45% it is not

economical to mine.

a) Any surrender of mining lease


b) It is a business risk, which




91. There is no mention about the

exit clause or surrender of the

mining lease by the successful

bidder. Request the clarification

with regard to the prerequisite for

surrender I exit of mining lease

and any penalty amount levied

thereof may be mentioned.



92. 10.4

Grant of Mining

Please clarify whether there

would be any implications in the

event the Successful Bidder


required





No.


amendment, if any

Response

lease (Tender

Document)

wishes to surrender the mining

lease prior to the expiry of the

mining lease period.

93. Tender document

Exit Clause

Tender document does not

specify about exit clause or

surrender of mine.

Pl consider to add the

exit clause as per MCR

rules 1960 or put a

reference of said rule in

tender document



94. Tender document a) Can the Successful bidder

surrender the mine if it is found

that Actual mineral reserves

mentioned in tender document is

exhausted before lease period

expires

b) If reserves exhausted before

expiry of lease period then how

you will apply the condition of

minimum 50% dispatch p.a.&

penalties in such situation.

c) How successful bidder will be

compensated under such

scenarios?

Pl clarify a) & b) Any surrender shall be as

per Applicable Law.

c) No compensation shall be

payable by the State

Government. It is a business risk,

which needs to be assessed by

the bidder. Please refer Clause

1.3 of the Tender Document.



No.


amendment, if any

Response

R&R Plan/Mining

Plan

95. MDPA Clause 10 In case new lessee incurs the

R&R cost if Government will

reimburse?

The Hon’ble Supreme Court

Order dated 30.07.2015 is amply

clear that the cost incurred for the

implementation of R&R Plan will

be reimbursed by the State

Government to the Successful

Bidder/ lessee after recovering

the same from the erstwhile

lessee.

However, in case such cost is not

recovered then the State

Government will not reimburse

any cost that’s incurred by the

Successful Bidder/ lessee.

Further, the amount reimbursed

shall not exceed the costs

associated with reclamation and

rehabilitation, as envisaged in the

Provisional R&R Plan. Please

refer Clause 10(c) of the MDPA.



No.


amendment, if any

Response

96. SC order point no. 6 If erstwhile lessee is unable to

pay R& R plan cost incurred by

successful bidder then who will

reimburse the same

Should not be

added as cost to

Successful Bidder









lessee.












97. Tender Document

Clause 11, stage II

Mining plan Is to be prepared by

preferred bidder and to be

submitted after successful bidder

declaration, how we can prepare

mining plan without having

It is the responsibility of the

Preferred Bidder to prepare the

final R&R Plan. The Bidders

should fully familiarize

themselves with the Hon’ble



No.


amendment, if any

Response

proper R & R plan? Can you

please modify bid document

accordingly.

Supreme Court Judgment in

Samaj Parivartana Samudaya

and Ors. vs. State of Karnataka

and Ors in W.P. (C) 562 of 2009

including the CEC Report dated

13.03.2012, which contains

details for preparation and

implementation of R&R Plans,

which has been approved by the

Hon’ble Supreme Court by its

order dated 13.04.2012.The CEC

Report dated 13.03.2012 and the

said order of the Supreme Court

are provided along with

Response to Bidders’ Queries at

MSTC’s portal.

It is to be noted that the Preferred

Bidder has to provide all the

baseline details to ICFRE. Based

on that the R& R Plan will be

prepared and further processed

for final approval of the CEC.

Mining Plan has to be prepared

only after approval of the R&R

Plan.

98. Clause 8.1

The conduct of

Pursuant to this clause,

Production Requirement shall be





No.


amendment, if any

Response

mining operations at

the Lease Area shall

be subject to the

milestones listed in

SCHEDULE E with

respect to production

(the “Production

Requirement”) and

the minimum

despatch

requirement for a

year, which shall be

50% (fifty percent) of

the Production

Requirement to be

achieved every year

(the “Minimum

Annual Despatch

Requirement”). It is

expressly clarified

that the Production

Requirement shall

be the permissible

annual production as

prescribed under the

approved R&R Plan.

(Mine Development

the permissible annual production

as prescribed under the approved

R&R Plan. In this context please

clarify:

1. What is the maximum annual

capacity of the mine for which

R&R Plan will be approved? Can

it be more than the capacity

indicated in the Provisional R&R

Plan?

2. Can the Successful Bidder

plan the mine capacity based on

requirement of its end use plant

and techno-commercial analysis,

irrespective of the capacity

mentioned in the Provisional R&R

Plan?

3. Can the R&R Plan approving

authority ask the successful

bidder to prepare the R&R Plan

for a lower capacity than that

mentioned in the Provisional R&R

Plan?

4. Whether maximum mining

permitted per annum will be

based on lease period and/or

R&R Plan and/or dumping area



















MSTC’s portal.









Plan.



No.


amendment, if any

Response

and Production

Agreement)

and/or infrastructure and/or cap

on mining? Please clarify.

99. Clause 10 (c)

it shall be

responsible for the

costs associated

with compliance with

the requirements of

the R&R Plan.

Provided however

that the costs

associated with

implementation of

the R&R Plan shall

be reimbursed by

the State

Government to the

Successful Bidder

subject to and upon

receipt of an

equivalent payment

from the erstwhile

lessee of the Lease

Area; provided

however that the

amount so

reimbursed shall not

1. What will be the periodicity of

reimbursement of cost incurred in

respect of compliance of R&R

Plan?

2. How will the Successful Bidder

be compensated for the gap, if

any, between the actual

expenditure and the amount

received from the erstwhile

lessee?

3. If, for any reason, erstwhile

lessee is unable to make

necessary payment, how will the

successful bidder be

compensated?









lessee.














No.


amendment, if any

Response

exceed the costs

associated with

reclamation and

rehabilitation as

envisaged in the

Provisional R&R

Plan. (Mine

Development and

Production

Agreement)

100. Table 5.1 (Foot note)

The cost proposed

of R&R is indicative

and may vary based

on actual

dimensions of the

proposed

engineering

structures, common

schedule rate of

Karnataka.

(Provisional R&R

Plan)

According to this clause actual

cost of R&R may be different

than that indicated in the

Provisional R&R Plan. However,

pursuant to clause 10(c) of

MDPA, amount reimbursed shall

not exceed the costs associated

with reclamation and

rehabilitation as envisaged in the

Provisional R&R Plan.

In such case, how will the

Successful Bidder will be

compensated for additional cost,

if any, incurred towards

implementation of R&R Plan?









lessee.











No.


amendment, if any

Response




101. MDPA Clause 10.

Mining Plan, R&R

plan and compliance

with applicable Law

What happens if the actual cost

of R/R plan implementation

exceeds the estimate? How such

amount will be reimbursed









lessee.














No.


amendment, if any

Response

102. Clause no. 2.3.3 of

R&R Plan/ MDPA

Clause 10.

Mining Plan, R&R

plan and compliance

with applicable Law

Rate of mining per annum :

Information on quantity

allowed (EC cleared qty ) to be

mined per annum for the mines

is essential for to assess

the bidder's actual likely

availability of ore





















MSTC’s portal.










No.


amendment, if any

Response


Plan.

103. Inadequate dumping area, waste

disposal and approach road

problems need to be

solved/addressed to.

The related issues shall be dealt

with by the Preferred Bidder as

part of the R&R Plan and Mining

Plan.

104. R&R Plan

1. Can mining start simultaneously along with implementation of R & R plan or it can be done only after implementation of R & R plan?

2. How can valuation of mine can be done properly without knowing annual mineable quantity of these mine?

1. Implementation of R&R plan

and mining activities can be done

simultaneously.

2. The Value of Estimated

Resources has been calculated

as per the Mineral (Auction)

Rules 2015.

105. Clause 10 (c)

It shall be

responsible for the

costs associated


the requirements of

the R&R Plan.

Provided however

that the costs

Government must provide for

timelines by which Government

would reimburse all such costs to

Successful Bidder irrespective of

whether government is able to

recover such payment from prior

lessee or not.

As Erstwhile lessee is

not a party to the MDPA

agreement, therefore,

State Government may

reimburse payments

towards compliance and

requirements of R&R

plan to successful

Bidder. Successful

It shall be

responsible for the

costs associated


the requirements of

the R&R Plan.

Provided however

that the costs

associated with

implementation of









lessee.



No.


amendment, if any

Response

associated with

implementation of

the R&R Plan shall

be reimbursed by

the State

Government to the

Successful Bidder

subject to and upon

receipt of an

equivalent payment

from the erstwhile

lessee of the Lease

Area; provided

however that the

amount so


exceed the costs

associated with

reclamation and

rehabilitation as

envisaged in the

Provisional R&R

Plan.

bidder cannot be

penalised for non-

completion of an act by

Government or Prior

lessee.

the R&R Plan shall

be reimbursed by

the State

Government to the

Successful Bidder

within 30 days of

submission of

documentary

evidence Provided

however that the

amount so


exceed the costs

associated with

reclamation and

rehabilitation as

envisaged in the

Provisional R&R

Plan.

In case Government

does not reimburse

such costs within

timeline so

stipulated,

Successful Bidder

shall have right to

adjust such costs

against Monthly

Payment due till














No.


amendment, if any

Response

such costs are

recovered.


Rama Rao Paol (ML

2621)

10.3 Execution of

Mine Development &

Production

Agreement

Provide details on

minimum/maximum mining

capping to be allotted for Rama

Rao Paol mine

Permissible annual production

requirement shall be as per final

R&R Plan.





















MSTC’s portal.



No.


amendment, if any

Response









Plan.

107. 10.2 (d) The

preferred bidder

shall be considered

to be the "

Successful Bidder"

upon,- satisfying the

conditions specified

in clause (b) of sub-

section (2) of the Act

with respect to

mining plan;

and

"T1" of the Time

schedule:

Submission of

Performance

Security and mining

plan along with

How mining plan can be prepared

without knowing the production

capacity of the mine which is yet

to be declared in Final R&R Plan

and to be approved by the CEC.





















No.


amendment, if any

Response

second installment

(10%) of Upfront

Payment by the

Preferred Bidder to

become Successful

Bidder.



MSTC’s portal.









Plan.

108. Approved R & R

plan

It is not clear in the tender

documents that, who will be

preparing the final R & R plan

and how they will be approached

by individual successful bidders


















No.


amendment, if any

Response






MSTC’s portal.









Plan.

109. Clause 8 of Model

Mine Development

and Production

Agreement about

“Production

Requirement”

(Information

Memorandum of all

11 C – Category

mines put up for

auction)

The information Memorandum of

all the 11 C Category iron ore

mines do not contain any

information about what shall be

the envisaged annual production

under the R & R plan prepared

for each mine

Since all the C Category

mines are for captive

use and there are

severe penalties for

annual production falling

below 75% of

production requirement

and auction money to

be paid at least on 50%

of production

requirement, one must

know beforehand what

Information

regarding envisaged

annual production

as per approved R &

R plan should be

made available in

the information

Memorandum;

Annual envisaged

production should

be derived from

mineable /















No.


amendment, if any

Response

is the permissible


prescribed under the R

& R Plan.

In the absence of this

information, one has to

pay for all 11

documents @ Rs 5

lakhs each and see the

permissible production

extractable reserves

and not from

geological resources

as given in MECL

report.

At least include in

the Information

Memorandum what

is the carrying

capacity of the road

infrastructure of

each mine.









MSTC’s portal.









Plan.

110. Based on the reserves, mine

production is to be planned. The

production depends upon the

following :-

a) reserve (identified)

b) dump capacity (not identified) -

5 Lacs MT/year

2 Lacs MT will be reject which












No.


amendment, if any

Response

needs space for dumping

c) Road capacity (Not identified)

It is therefore recommended that

Dump Capacity and road

capacity of M/s Lakshminarayan

Mining Company be declared to

make the mining plan












MSTC’s portal.









Plan.

111. Annual Production What is the annual production

plant envisaged in the R&R

plans, Mine wise details

required?









No.


amendment, if any

Response















MSTC’s portal.









Plan.

112. Yearly Production of

Iron Ore

Since there is no mention of

maximum production that can be

done from each mine, it is difficult






No.


amendment, if any

Response

to assess the costs. If the

maximum production limit is very

low then the mining activity may

not be economical. So kindly look

into this and inform the maximum

production allowed by each mine.


















MSTC’s portal.









Plan.



No.


amendment, if any

Response

113. MDPA Clause 10. Without the R & R Plan in place

before bidding, the quantity to be

mined is not known, in the

absence of clarity on permitted

annual mineable quantity, the

bidders might face a surprise as

to the viability / feasibility of a

mine subsequent to R & R plan,

hence we need to know the

annual mineable permitted

quantity before the bidding

process.





















MSTC’s portal.










No.


amendment, if any

Response


Plan.

114. Clause 5 : Eligibility

No mining lease

shall be granted by

the State

Government unless

upon the filing of a

mining plan

Production capacity for

preparation of mining plan.

Mining Plan cannot be

prepared without the

production capacity,

which will be known

only after R&R plan and

the basis for R&R plan

preparation is mining

plan.

Mining Plan shall be

prepared basis

reserves estimated

by MECL to be

mined in 20 years.





















MSTC’s portal.







No.


amendment, if any

Response





Plan.

115. Clause 8.1: It is

expressly clarified

that the Production

Requirement shall

be the permissible


prescribed under the

approved R&R Plan.

(Mine Development

and Production

Agreement)

What if the annual production

under R&R Plan is not a feasible

quantity, hence R&R quantity to

be specified.

The bidders might face

a surprise as to the

viability / feasibility of a

mine subsequent to R &

R permitted quantity,

hence we need to know

the same before the

bidding process or there

has to be exit option

before start of mining.

The estimated

permissible annual

production as per

provisional R & R

plan is

__________MT





















MSTC’s portal.



No.


amendment, if any

Response









Plan.

116. Provision R&R Plan Without the R & R permitted

quantity, before bidding, the

quantity to be mined is not

known, in the absence of clarity

on permitted annual mineable

quantity, the bidders might face a

surprise as to the viability /

feasibility of a mine subsequent

to R & R permitted quantity,

hence we need to know the

annual mineable permitted

quantity before the bidding

process or there has to be exit

option before start of mining.

Maximum permissible annual

production shall be as per the

R&R Plan.


















No.


amendment, if any

Response






MSTC’s portal.









Plan.

117. Provision R&R Plan R & R quantity calculations

whether for 20 years or 50 years.















No.


amendment, if any

Response









MSTC’s portal.









Plan.

118. Clause 10 (c) of

MDPA: The

Successful Bidder

shall be responsible

for the costs

associated with the

requirements of the

R&R plan.

Please clarify whether the

reimbursement for the

implementation of the R&R Plan

will be made within a definitive

timeline.

In the event the erstwhile lessee

defaults in making payments for

the costs associated with the

The erstwhile lessee

should be required to

submit a payment bank

guarantee/any other

suitable payment

security in favour of the

Successful Bidder which

can be invoked by the

Successful Bidder within









lessee.



No.


amendment, if any

Response

Provided however

that the costs

associated with the

R&R plan shall be

reimbursed by the

State Government to

the Successful

Bidder subject to

and upon receipt of

an equivalent

payment from the

erstwhile lessee of

the Lease Area;

implementation of the R&R Plan

to the State Government, please

clarify what recourse would be

available to the Successful

Bidder

1 month of failure by the

erstwhile lessee to

make payment to the

State Government for

costs associated with

the implementation of

the R&R plan.












119. MDPA Clause 8 and

Schedule E

Our understanding was that

based on approved R&R plan,

maximum annual production for a

mine will be fixed which will also

be taken in account for MDP

agreement. Minimum 50% of this

annual production multiplied by

bidders quote multiplied by IBM

price is payable. Production from

the mine is purely for end use

plant. How the mismatching of

end use plant and mine

production level will be

addressed? Will the new lessee

















No.


amendment, if any

Response

has liberty to choose his

production level in mining plan in

accordance with his-end-use

requirement/strategy subject to a

cap for that mine by the State?

In the current scenario,

provisional R&R is given and final

R&R will have to be prepared and

get approved by successful

bidder later. Does it mean that

new lessee can get the

production level according to his

end use plant subject to a

maximum cap defined by

approved R&R. this means that

State Govt annual revenue can

be variable depending upon end

user capacity also and not

necessarily by highest bid?

Illustration :

Mine A : Maximum allowed

annual production is 2 MTPA

End user no.1 has bid 36%, his

annual capacity reqd is 1.8 MTPA

End user No 2 has bid 40% and

his annual capacity is 1MTPA

If average price is 2000 rupees







MSTC’s portal.









Plan.



No.


amendment, if any

Response

EU1 will pay annually :

1.8X2000X36% = Rs.129.60

Crores

EU2 will pay annually :

1X2000X40% = Rs. 80.00

Crores

It may be seen that a lower

bidder will give higher revenue to

State Govt and also the NPV for

mines life.

If the auction process design

considers this ok, not

challengeable by anyone later in

Court of Law, its ok.

120. Penalties

(Provisional R&R

Plan –

Lakshminarayan

Mine & Rama Rao

Paol Mine)

Is there any penalty levied by any

statutory authority and not yet

paid related with these mines?

Please clarify.

Any penalty levied/ leviable on

the erstwhile lessee shall not be

imposed on the Preferred Bidder/

Successful Bidder/ new lessee.

However, if an eligible erstwhile

lessee is a Preferred Bidder then

to become the Successful Bidder

inter-alia clause 10.2 e) of the

Tender Document shall apply.

Also, as far as R&R Plan

implementation is concerned the

clarifications related to R&R Plan,

as provided under section “R&R



No.


amendment, if any

Response

Plan/Mining Plan” of this

document pertaining to responses

to Bidders’ queries. shall apply.

121. Provision R&R Plan

of Mines ML 2365 &

ML 2366

ML no 2365 and 2366 should

have been merged and auctioned

as one mine. The mineable

reserves and mine ability of both

these mines separately by two

lessees will be unviable and not

in conformity with mineral

conservation principles of the

nation. In fact provisional R & R

is prepared and given in one

document and not separately.

Then how these two leases are

put on auction separately.

The provisions of Tender

Document and MDPA shall

prevail.

122. Tender Document

Clause 2.15

“R&R Plan” shall

mean the final

Reclamation &

Rehabilitation plan

for the Concession

Area prepared by

1. The Successful Bidder should

approach which agency for

preparation of final R&R Plan?

2. What is the timeline for

preparation and approval of R&R

Plan?













No.


amendment, if any

Response

the Successful

Bidder in

accordance with the

guidelines for

preparation as per

the order dated 13th

April 2012 of the

Supreme Court in

the Samaj

Parivartana

Samudaya and Ors.

vs. State of

Karnataka and Ors

in W.P. (C) 562 of

2009, matter and

approved by the

Central Empowered

Committee.

3. The Karnataka Government

should ensure fast preparation

and approval of R&R Plan, as

mine plan can be prepared only

after the approval of R&R Plan.











MSTC’s portal.









Plan.

123. General Mine Closure plan

Tender document does not

specify anything about mine

closure plan?

Pl consider to put all

terms & conditions for

mine closure plan.

Mine closure plan shall be as per

Applicable Law.



No.


amendment, if any

Response

Value of Estimated

Resource

124. - The average sale price of Iron

Ore as per IBM should we

consider from January to

December or April to March of

every year?

Clarification required The Value of Estimated

Resources has already been

estimated and provided for each

mine in accordance with the

Mineral (Auction) Rules, 2015.

The same can be found in the

Mine Block Summary as well as

the mine specific Tender

Document.


Clause 5. b)

Value of Estimated

Resources

Value of estimated resources Is

calculated based on geological

resources for this auction but in

case of coal auction it was based

on mineable reserves, can you

consider the same and revise the

value of estimated resources

based on mineable reserves.

What ratio is considered

between ore and ore fines while

calculating estimated value of

resources?

Should be

calculated on

mineable reserves

The Value of Estimated



Rules 2015.

The ratio of lumps and fines has

been calculated taking into

account the historical data in that

regard by the Technical

Committee. Ratio of lumps and

fines, as considered for

calculation of Value of Estimated

Resources by the Technical

Committee, has been uploaded



No.


amendment, if any

Response

on MSTC portal only for the

information of the Bidders.


Clause 9 ii)

In working out estimated

resource value -IBM prices up-to

aug 2015 are considered. Can

you revise it and consider till

December 15, since there Is

sharp drop in prices

IBM prices for all grades of

above 58% are published as

same price for grade up-to 65%

fe can you will correct this, since

the prices uploaded by IBM are

wrong.

IBM prices till

previous month to

be considered while

working out

estimated resource

value Frequent

correction are

required to be done

to have correct

prices Fe grade

wise.

Clear road map to

be defined

Value of Estimated Resources

has been calculated in

accordance with Mineral (Auction)

Rules, 2015. The available

average price per metric tonne

published by the Indian Bureau of

Mines for a period of twelve

months immediately preceding

the month of computation has

been considered for calculation of

Value of Estimated Resources.

Since IBM prices for September

and October 2015 were not

published as on the date of

computation by the Technical

Committee, prices till August

2015 have been considered for

calculation of average price.



No.


amendment, if any

Response

127. Updation of IBM

Prices (IBM Prices)

It has been observed that IBM

prices are updated wrongly FE %

wise.

Pl consider to

correct this and

update on time




Rules, 2015.


Clause 9 ii)

The IBM prices are declared only

till September ’15 and as such

last 12 months average prices

are based on high market prices.

Further, IBM declared prices are

same for the wide range of Fe%

(55% to 65% and above) and

does not reflect the right price for

the grade. This results into

inflated ‘Value of Resources’ and

the related payments. This

needs critical review.

The Value of Resource should

be based on current prevailing

market prices - last month's price

as that is the actual price on

date.





















No.


amendment, if any

Response

129. Clause 5 (b)

Value of Estimated

Resources

Tender Document

It is mentioned that the Value of

estimated resources has been

worked out based on the one

year price of Iron Ore taken till

August’15.

(a) As per Mineral Auction Rules 2015, Value of estimated resources to be calculated based on 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.

Since the Auctions are

initiated in February’16, the

Value of Mineral Resources

should be calculated based

on one year prices till

December 2015.

(b) Further the definition of Value of Mineral resource states that the estimated quantity of mineral resources for which the mineral block is being auctioned, expressed in

Our submissions are

considering the

provisions of Mineral

Auction Rules and in the

spirit of auction process

where only mineable

minerals are to be

valued.

Valuation should be

done based on current

prices, therefore instead

upto Aug 15, the IBM

prices upto Dec 15, may

be considered

Given that mineable

resources are not

yet established for

these mines, once

the successful

bidder completes R

& R plan &

extractable

resources are

worked out, Upfront

Payments and

Performance Bank

Guarantee should

be worked on the

extractable

resources rather

than geological

resources

expressed in the

information

memorandum.

(a) & (b) Value of Estimated

Resources has been calculated in



















No.


amendment, if any

Response

metric tonne should be considered.

Mineral Resource by definition is

ore which can be economically

extracted. Hence only those

resources which can be mined

i.e. mineable reserves should be

considered for calculation of

Value of Mineral Resource.


Rama Rao Paol (ML

2621)

5 (b) -value of

estimated resources

in respect of the

Concession area is

INR 7304,85.92.913

Why last 12 months average IBM

declared price not taken for

calculation of Value of estimated

resources

IBM reported mineral

prices considered are till

the month of July/Aug

15, while tender is

floated in the month of

Dec15. There have

been significant

reduction of mineral

prices between Aug15

to Nov15. So value of

mineral resources

estimation is on higher

side, where by

increasing the amount

of upfront and

performance security for

bidders. Recalculation



















No.


amendment, if any

Response

should be done in this

regard and

communicated to

bidders, so that

payments payable are

justified.

Moreover MER 2015

defines value of mineral

resources as stated

below

“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 8twelve





No.


amendment, if any

Response

months immediately

preceding the month of

computation of the

Value of Estimated

Resources

131. Clause 5 (20 (b) Net

worth and Value of

Estimated

Resources

(Information

Memorandum &

Model Tender

Document)

Please indicate the value of

estimated resources in each of

the 11 mines so as to enable the

applicant to ascertain its eligibility

under Net Worth criterion.

Latest iron ore prices

should be used to

determine the value

rather than last 12

months’ since the prices

have gone down

substantially in the last

one year.

Ideally, the value of

estimated resources

should be computed

from Mineable /

Extractable

resources and not

the geological

resources which are

highly inflated.

It is indicated in Information

Memorandum / Mine block

summary of each mine.


Clause 5

Value of the estimated resources:

In the tender document, the

amount of value of estimated

resources is mentioned however

the basis of arrival of the value of

the estimated resources in terms

of average rate of Fines & Lumps

and the ratio of Fines & Lumps to

be clarified.




Rules 2015.











No.


amendment, if any

Response





Clause 5

Calculation of Net worth- In the

Tender advertisement

Laxminarayan Mines reserves

are estimated as 14.709 MMT

and in the Tender Document

paragraph 5 Explanation 3, Page

10, value of estimated Reserves

identified as INR 1632,20,59,543

but in R&R report.

The proved and probable

Reserves are 11.97 MMT the

Mine able reserves are 11.97

MMT the Mine able Reserves are

9.0 MMT

My question is that as to why you

have considered total resources

and Not mineable resources.




Rules 2015.

134. Presently you have considered

the IBM prices upto August,

2015, whereas the Tender Bidder

is in January 2016. In actual fact

you should have considered

minimum upto November 15 IBM

prices as the rates have crashed










No.


amendment, if any

Response

and by adopting this more

number of End users would have

become eligible in Net worth and

offering more competition.













Clause 5

The IBM prices are declared only

till September'15 and as such last

12 months average prices are

based on high market prices and

are not commensurate with

current market prices which are

much lower. The value of

resource should be based on the

current prevailing market prices-

last month's price as that is the

actual price on date.



















No.


amendment, if any

Response



136. Tender Document 5 Value of Estimated Resources of

each mine

Value of Estimated Resource has

been indicated in Information






Rules 2015.

137. Tender document

Clause 5

Can we consider average rates of

lumps and fines while calculating

average value of Estimated

Resource (calculation as per

rates mentioned in IBM monthly

charts)

Value of estimated resource has

been calculated for each mine by

the State Government based on

Mineral (Auction) Rules 2015.

Value of Estimated Resource has

been provided in Information




Clause 5

Kindly inform “value of estimated

Resources” so that bidder will

know if he is qualified/eligible or

not?


has been mentioned in

Information Memorandum / Mine

block summary of each mine.



No.


amendment, if any

Response

139. Tender Document What is the percentage of fines

and lumps to be considered to

arrive at the value of reserves

based on the last 12 months

average of IBM price for the

purposes of payment of upfront

fee of 0.5% and performance

security of 0.5%, is it 50:50 or

30:70.




Rules 2015.













Clause 14

Bid security is for total geological

resources as given by MECL

report. But actually 100%

recovery is not possible. So

minable resources should be

taken instead of geological

resources.




Rules 2015.

Value of bid security has been

provided in mine specific Tender

Document of each mine.



No.


amendment, if any

Response

141. Part A Clause 4 c

Value of Estimated

resources of the

Concession area in

Indian Rupees

(Information

Memorandum / Mine

Block Summery)

Method of calculation of the value

of estimated Reserves.

To be calculated on the

basis of Mineable

reserves and not on

Geological reserves.

Arrived on the basis

of Mineable

Reserves.




Rules 2015.


Clause 5

Geological reserves as per MECL

is the basis for all calculations

and payments, but the bidder is

getting only for Mineable

reserves or R & R reserves,

hence all the calculations must

be based on Mineable reserves.

As per Rule 2 (m) of the

Mineral (Auction) Rules,

2015, the estimated

quantity of mineral

resources for which the

mineral block is to be

auctioned is taken into

consideration for

calculation of Value of

Estimated Resources.




Rules 2015.

Upfront Payment

143. Clause 7.1.3 of

MDPA: Payments

Clause 7.1.3 provides that the

Upfront Payment paid by the

Successful Bidder will be

adjusted in full against the

amounts payable in accordance

with the per cent of Value of

Clarification required Clarification required The Upfront Payment paid by the

Successful Bidder shall be


amount payable in accordance


Mineral Despatched quoted as



No.


amendment, if any

Response

Mineral Dispatched quoted as the

final price offer within the first five

years of commencement of

production of minerals. In this

regard it will be useful to clarify in

what proportions will such upfront

payment be adjusted with the

monthly payments.

the Final Price Offer within the

first five years of commencement

of production of mineral(s). This

adjustment of Upfront Payment

shall be done each year in

proportion of production stated in

Mining Plan for that year to the

aggregate of the production

stated in the Mining Plan for first

five years. Any unadjusted portion

of the Upfront Payment remaining

at the end of fourth year shall be

adjusted in full in the fifth year.


Addendum.


Clause

12.1

If upfront payment is not

adjusted in first 5 years, then

how it will be refunded / adjusted

To be refunded after

completion of 5

years period.

Any unadjusted portion of the

Upfront Payment remaining at the

end of fourth year shall be



Addendum.

145. Clause 12.1

The Upfront

Payment paid by the

Please clarify:

1. the methodology of adjustment

2. Will it be adjusted in proportion

1. & 2. The Upfront Payment

paid by the Successful Bidder

shall be adjusted in full against



No.


amendment, if any

Response

Successful Bidder

shall be adjusted in

full against the

amount payable in

accordance with the

percentage of Value

of Mineral

Despatched quoted

as the Final Price

Offer within the first

5 years of

commencement of

production of

mineral(s).(Tender

Document for Rama

Rao Paol (Mining

Lease - 2621))

to the quantity of mineral

despatched?

3. How will it be adjusted in case

of shortfall in target production?

4. In case the mineable reserve

exhaust in less than 5 years, how

will the Upfront Payment will be

adjusted?

the amount payable in

accordance with the per cent of

Value of Mineral Despatched

quoted as the Final Price Offer

within the first five years of

commencement of production of

mineral(s). This adjustment of

Upfront Payment shall be done

each year in proportion of

production stated in Mining Plan

for that year to the aggregate of

the production stated in the

Mining Plan for first five years.

Any unadjusted portion of the

Upfront Payment remaining at the

end of fourth year shall be



Addendum.

3. The Upfront Payment paid by

the Successful Bidder shall not be

adjusted against the amount

payable for the shortfall

production. Please refer Clause 7

(Payments) of MDPA.



No.


amendment, if any

Response

4. Provisions of the Tender


prevail. Please refer Rule 11 of

Mineral (Auctions) Rules 2015.


1. If there is huge variation between the resource and reserves declared in tender document and same estimated by successful bidder after taking up detailed exploration, whether performance security and upfront payment will be appropriated?

2. Whether security deposit can be paid by considering minable reserves instead of total resources.

1. It is a business risk, which




2. Performance Security is

payable as per the terms &

conditions of the Tender

Document and MDPA. The

amount of Performance Security

has been mentioned in mine

specific Tender Document.


Clause 2.19

How much Upfront fee payable

as per auction rules (BG or DD)

The amount of Upfront Payment

is mentioned in mine specific

Tender Documents. It is 0.5% of

the Value of Estimated

Resources to be paid in three



No.


amendment, if any

Response

instalments i.e. 10%, 10% and

80%.

Upfront payment to be paid in the

form of Demand Draft payable at

Bengaluru.

148. Clause12.1

The Upfront

Payment paid by the

Successful Bidder

shall be adjusted in

full against the

amount payable in

accordance with the

percentage of Value

of Mineral

Despatched quoted

as the Final Price

Offer within the first

5 years of

commencement of

production of

mineral(s).

1. We understand that the

Successful Bidder will not be

required to make any payment in

respect of Final Price Offer until

the Upfront payment is adjusted,

except payment in lieu of Annual

Payment for shortfall in Minimum

Annual Despatch Requirement.

Please clarify, if our

understanding is not correct.

2. If the Successful Bidder is

meeting the Minimum Production

Requirement in all five years but

Upfront Payment has not been

adjusted completely and there is

still some balance. Then, what

mechanism will be followed for

adjustment of balance amount?

The Upfront Payment paid by the



amount payable in accordance


Mineral Despatched quoted as

the Final Price Offer within the

first five years of commencement

of production of mineral(s). This

adjustment of Upfront Payment

shall be done each year in

proportion of production stated in

Mining Plan for that year to the

aggregate of the production

stated in the Mining Plan for first

five years. Any unadjusted

portion of the Upfront Payment

remaining at the end of fourth

year shall be adjusted in full in the

fifth year.



No.


amendment, if any

Response


Addendum.

Cost of

documents/Reports

and expenses

149. Tender Document 10 (2) f

Declaration as a

Successful Bidder

What will be the cost for

geological report and R & R plan

borne by the successful bidder?

Clarification required Please refer to Clause 10.2 (f) of

the Tender Document for

understanding the various

expenses to be borne by the

Preferred Bidder. The sum total of

these expenses have been

disclosed under the same clause

in the mine specific Tender

Documents.

150. Clause 10 2 f) In all the tender documents,

fixed amount is to be paid by the

successful bidder towards the

cost of geological survey,

preparation of provisional R&R

plan, survey, digital global

positioning system etc.

As per the Hon'ble Supreme

Court order, the amount to be

spent towards R&R is to be

Fixed amount to be paid by

Preferred Bidder as per clause

10.2 f) of the Tender Document,

which will not be reimbursed.










No.


amendment, if any

Response

reimbursed to the successful

bidder after recovery from the

erstwhile 'C' category lessee.

Request the clarification is sought

on the modality of the

reimbursement of the total fixed

amount mentioned in the tender

document.


lessee. However, in case such

cost is not recovered then the

State Government will not

reimburse any cost that’s incurred

by the Successful Bidder/ lessee.







Utilization of mineral

151. Clause 4.1.1

The core samples

with more than 45%

Fe and above have

been considered as

the iron ore. The ore

exhibits wide

variations of physical

properties ranging

from compact, hard

and massive ore to

soft, granular,

laminated,

unconsolidated

Resource estimation has been

done with 45% Fe as cut-off

grade. However, most of the steel

manufacturer cannot utilize iron

ore below 55% Fe content.

In such scenario:

1. What are the permitted options

for utilization of low grade iron

ore?

2. Will the successful bidder be

allowed to sale low grade iron ore

in the market?

1. Permissible option is

beneficiation of low grade iron ore

to be done by the Successful

Bidder/lessee himself to be

further used only for the Specified

End Use by the Successful

Bidder/lessee himself.

Beneficiation plant has to be set

up by the Successful

Bidder/lessee himself only.

2. Selling of iron ore with or

without beneficiation is not



No.


amendment, if any

Response

sandy blue dust

(rare in Ram Rao

Paol mine) or

reddish brown

powdery ore.

(Geological Report

(text))

allowed. Please refer Clause 6 of

MDPA.

152. MDPA Clause 6,

Utilization of Mineral

Successful bidder may not be

able to use the entire range of

ore. What is the procedure for

sale / disposal of such ore which

cannot be consumed captively?

The mine will be allotted for the

Specified End Use only, and

selling of ore is not allowed.

Please refer Clause 6 of MDPA.

153. Clause No. 6/1 of

MDPA

1) Successful bidder will be

required to process the iron ore

(e.g. beneficiation of lumps &

fines) before he can consume it.

2) What is the procedure to be

followed for the sending and

accounting of the ore

processed?

1) Please note that beneficiation

plant has to be set up by the

Successful Bidder /lessee himself

only to be further used only for

the Specified End Use by the

Successful Bidder/lessee himself.

2) This will be as per Applicable

Law.

154. General Whether non usable ore in the

captive plant can be sold?


Specified End Use, and selling of



No.


amendment, if any

Response

ore is not allowed. Please refer

Clause 6 of MDPA.

155. MDPA Clause 6 & 8 Successful bidder may not be

able to use the entire range of

ore. What is the procedure for

sale/ disposal of the such ore

which cannot be consumed

captively.




Clause 6 of MDPA.

156. clause 6.2 of

MDPA: (ii) not be

sold or transferred or

otherwise disposed,

either directly or

indirectly

In case the mined iron ore could

not be used due to FE content or

other specification variation, what

is to be done with the stock which

cannot be used by the end users,

as selling of mined mineral is not

allowed.

Operational

effectiveness & to solve

dumping problems

The mined mineral

which cannot be

utilised for the end

use can be disposed

off after taking due

permission from the

concerned

authorities




Clause 6 of MDPA.

Please note that beneficiation

plant has to be set up by the





157. MECL Report In MECL report reserves are

estimated Fe grade-wise,

present circumstances below

55% grade Fe reserves cannot

be utilised by most of steel

industries since they do not have

facility to upgrade the same,

Should be allowed

to beneficiate

outside the plant or

should be allowed to

e-auction such

grade




Clause 6 of MDPA.



No.


amendment, if any

Response

whether in such situation, they

will allow such grade ore and

fines to sale in the market

through e-auction.

158. SCHEDULE D -

PARTICULARS OF

THE END USE

PLANT (Mine

Development and

Production

Agreement)

Can mineral be used in any other

plant of specified end use than

those mentioned in the Schedule

D of the Mine Development and

Production Agreement (MDPA)

Yes, provided the Successful

Bidder/lessee himself is engaged

in the production of sponge iron

and/or pig iron and/or steel and/or

pellets in the other plant.

Provided further that the

Successful Bidder shall seek prior

approval of the State Government

of Karnataka by providing

relevant details in that regard.

Provided also that the Successful

Bidder continues to adhere to the

stipulations under this Agreement

with respect to the utilisation of

mineral.

Please refer the


159. Can we put up a Beneficiation

plant at Mine head, if so whether

the reserve price / DMG Royalty

& FDT is to be paid on the

beneficiated waste slimes or not

Yes, provided that the

beneficiation plant has to be set

up by the Successful Bidder

/lessee himself only to be further

used only for the Specified End



No.


amendment, if any

Response

as the same is not moving out of

the lease area.

Use by the Successful


Royalties/Taxes/fees/duties/charg

es/ amounts payable shall be as

per Applicable Law.

160. - We do not have a beneficiation

plant, but the mine would

generate low grades, we cannot

sell the low grades, can we send

the material to outside

beneficiation plant for job work

beneficiating and take the

beneficiated ore from such plant

into our plant for captive

consumption.

No. Beneficiation plant has to be

set up by the Successful Bidder





161. Utilization of

minerals (page 62,

paragraph 6)- As per

the judgement of

Hon’ble Supreme

Court, specified End

use- All Minerals

extracted (1) shall be

utilized for solely for

specified End-use (ii)

Not to be sold or

This gives rise to following

question.

1.the sponge plant alone cannot

use FINES-How to manage 50:50

Ratio

2.The pellet plant cannot use

lumps, Hence 50:50 ratio despite

making in the Lumps- A costly

item to the made cheaper by

additional cost of crushing-Not in

the National Interest.

1, 2, & 4.The ratio of lumps and

fines at 50:50 will be considered

for the purpose of calculation of

shortfall quantity in case of no

production after the grant of

mining lease. Please refer Clause

7.1.2 of MDPA for more details.

Furthermore, it is the

responsibility of the Successful

Bidder to use the iron ore



No.


amendment, if any

Response

transferred or

otherwise disposed

off, either directly or

indirectly:-

3.Can a specified End user take

a sponge iron plant on lease

which have bid for mine or not.

4. 50:50% ratio would further

create problem in dumping of

fines to achieve 75% minimum

production.

5.Can a beneficiation plant be put

by End users/specified uses.

produced from the mine in its

Specified End Use plant.

3) No. the Successful Bidder

must own the Specified End Use

plant.

5. Beneficiation is not a Specified

End Use for eligibility in the bid.

However, a Preferred Bidder/

Successful Bidder/ lessee can set

up his own beneficiation plant for

use of the beneficiated ore in the

Specified End Use plant owned

by him.

162. We do not have a beneficiation

plant, but the mine would

generate low grades, we cannot

sell the low grades, can we send

the material to outside

beneficiation plant for job work

beneficiating and take the

beneficiated ore from such plant

into our plant for captive

consumption.

No. Beneficiation plant has to be

set up by the Successful Bidder







No.


amendment, if any

Response

163. Can we put up a Beneficiation

plant at Mine head, if so whether

the reserve price / DMG Royalty

& FDT is to be paid on the

beneficiated waste slimes or not

as the same is not moving out of

the lease area.

Yes, provided that the

Beneficiation plant has to be set

up by the Successful Bidder





Royalties/Taxes/fees/duties/charg

es/ amounts payable shall be as

per Applicable Law.

164. NA (Tender

Document)

Whether beneficiation plant can

be installed in the mine area

Clarification required Clarification required Yes. However, Beneficiation plant

has to be set up by the





165. MDPA

Clause 6.1.

The Successful

Bidder shall utilize

the Mineral strictly in

compliance with

Applicable Law,

45-58% fe content of ore & fines

cannot be used directly in the

End use plant. This requires

beneficiation process- for which

the tonnage available in

proposed auction mines is very

less. Some material requires set

up of pallet plant also. In this

situation, following issues :-

Will the Successful

Bidder be allowed :

a. To get low quality ore

beneficiated at

beneficiation plant of

third party on job work

basis

a) No. Beneficiation plant has to

be set up by the Successful

Bidder /lessee himself only to be

further used only for the Specified

End Use by the Successful




No.


amendment, if any

Response

including the Act and

the rules framed

thereunder

Low quantity of availability

minerals and high investment in

beneficiation plant.

Need to set up pallet plant also

Or

b. You will allow to sale

such minerals to plant

who has such type of

facilities?

b) Selling of ore is not allowed.

Please refer Clause 6 of MDPA

Common

Roads/Boundary

166. Common Boundary In most of the mines - common

roads are there, whether Govt.

will give all rights regarding use

of the common boundary in

MDPA or mining lease

agreement

The issue of common boundary

shall be dealt with as per

Applicable Law.

The use of common roads shall

be in accordance with Applicable

Law.

167. Geological Report Common boundary /common

approach roads: Dispute

settlement mechanism may be

specified for such issues.

Disputes related to common

boundary/ common approach

roads shall be dealt with as per

Applicable Law.

168. Common boundary Common boundary/ common

approach roads: Dispute

Disputes related to common

boundary/common approach



No.


amendment, if any

Response

Settlement mechanism may be

specified for such issues

roads shall be dealt with as per

Applicable Law.

.

169. General Whether surface rights of the

lease area will be transferred to

successful bidder by the State

Govt.

Surface rights is not the subject of

this Tender Document.

170. Boundary dispute

(Provisional R&R

Plan –

Lakshminarayan

Mine & Rama Rao

Paol Mine)

Is there any ongoing boundary

dispute with any party related

with these mines in any courts of

India? Please clarify.

The lease boundary of each of

the mining leases has been

approved by the Hon’ble

Supreme Court vide judgment

and order dated 18 April 2013.

171. Mismatching of coordinates as

per data provided:

Since we have taken Tender

document of only one mine and

analyses the data provided along

with Tender document. It is

observed that mining lease area

works out to be 83 hectares

whereas in the advertised Tender

document is given 86 Hectares.

It appears that lease boundary

gets shifted towards Non-Mining










provided.



No.


amendment, if any

Response

area. Whether it will be rectified

later for the successful Bidder.

172. New Insertion

(Suggested by

bidder)

Any mining infrastructure,

including land, associated with

the working of mine needs to be

transferred by erstwhile Lessee

to the Successful Bidder for

continued operations of these

mines.

The valuation of such assets can

be done by Government of

Karnataka following same

principles as followed by

Government of India for

valuation of assets in coal mines.

As the land availability

in and around mineral

bearing area is limited,

therefore, the

Successful Bidder can

build mine infrastructure

only on the same land

which was availed by

erstwhile Lessee. The

modalities of such

transfer were developed

in the earlier coal block

auction conducted by

the Ministry of Coal

Successful Bidder

can opt to acquire

the assets

associated with the

Category C mine

lease which are part

of the mining project

whether or not

located within

Mining Lease area.

Such assets would

be transferred by

Government of

Karnataka to

Successful Bidder at

the value

determined as

follows:

• Any land acquired for the purpose of activities relating to Category C mines would be valued at actual purchase price (as per registration deed)



prevail. The mining lease area

shall be as per boundaries fixed

by the Hon’ble Supreme Court

vide judgment and order dated 18

April 2013. The boundary pillars

have been constructed as per the





provided.



No.


amendment, if any

Response

plus 12% simple interest till 28th December 2015 (date of NIT) since the date of registration.

All other fixed

assets would be

valued at

depreciated book

value till the date of

last quarter as

audited by Statutory

Auditor.

173. Schedule V

Information

Memorandum

Tender Document

Annexure-I

We have analyzed the data given

in MECL geological report and in

bid document. Following are our

observations which needs

clarification/ amendments.

1) Lease area is found to be

83.5464 ha after plotting the co-

ordinates given in Annexure-I of

bid document whereas in

Information memorandum it is

mentioned as 86.12 ha and

matches with the lease boundary

co-ordinates given in it.

2) Also today ( 8/1/2016) we










provided.



No.


amendment, if any

Response

checked BP A of LMC and found

UTM co-ordinates given in

Annexure-I of bid documents is

different and it is matching with

the coordinates given in the form

of degree, minutes and seconds

in Information Memorandum.

The UTM Coordinates of BP A

given in Annexure-I and form field

given below:-

As per

Northing: 1679292.2775

Easting: 659080.7963

Co-ordinates found in field by

using GPS:

Northing: 1679292

Easting : 659108

There is a difference of 28 metres

We tried to find out other BP

Pillars but could not do so as the

mine road was blocked by

transport trucks.

3) It was also checked by plotting

the co-ordinates given in

Annexure-I of bid document and

with those given in Information

Memorandum and it is found that

the lease position as per



No.


amendment, if any

Response

coordinates given in Annexure-I

is shifted almost 30 to 50 metre

towards south. Whereas lease

boundary coordinates given in

information memorandum are

matching with the GPS

Coordinates of BP A found in the

field.

Total Lease Works out to be

83.5464 Ha and not 86.12 Ha.

Please Clarify.

174. Tender document Lease Area land is not sufficient

to carry out mining operations.

Govt to provide and allot

additional land in the mining

lease area required for dumping

waste dump , building

infrastructure etc

Additional land to

provide by GOK.

All such activities need to be

planned and executed within the

boundaries of the Lease Area

only.

Technical Bid

/Documents

175. Tender Document Clause 5 (b) (1), Explanation 2

The Net worth will be calculated

as on 31st March, 2015 or the

last date of submission of tender

documents announced by the

Government?

-- The Net worth shall be as per the

audited Balance Sheet of the

immediately preceding financial

year of the Bid Due Date. Please



No.


amendment, if any

Response

refer Explanation 2 of 5 (b) 1 of



Clause B (1) (d) iv of

Schedule I

Can we get list of documents

required to qualify as end user

List of documents to

published

Please refer the


177. Schedule I

Clause

B(1)(d)Documents to

evidence compliance

with the eligibility

conditions must be

enclosed with the bid

letter, duly certified

by one of the

directors of the

Bidder, in case the

Bidder is a company,

or self-attested in

case the Bidder is an

individual. Such

documents must

include:(Tender

Document for Rama

Rao Paol (Mining

Lease - 2621))

Do we need to submit any

document in addition to that listed

in point (i) to point (vi) of clause

B(1)(d) of Schedule I?

If yes, please specify.

Yes, In case the Bidder is a

subsidiary of another company

incorporated in India and is using

the net worth of such holding

company for the purpose of

eligibility, then the Bidder shall

submit its shareholding pattern

including name of the

promoter(s)/ owner (s) as on 31st

March 2015 duly certified by the

statutory auditors. In addition, in

such case, the Bidder shall

submit a board resolution by the

holding company in favour of the

Bidder for permission to use net

worth for the purpose of eligibility.

Please refer the




No.


amendment, if any

Response

178. Schedule I

Clause E.(1)(a)

The affidavit must be

executed in India in

accordance with

Applicable Law and

it must be issued in

accordance with the

constitutional

documents of the

Bidder after

obtaining all

corporate approvals

as may be required.

The extract of

constitutional

documents and

certified copies of

the corporate

approvals must be

enclosed with the

power of attorney.

(Tender Document

for Rama Rao Paol

(Mining Lease -

2621))

Does constitutional document

and corporate approval is also

required separately for Affidavit?

The affidavit needs to be issued

in accordance with the

constitutional documents of the

company and after obtaining all

internal corporate approvals.

Thus, (for example) if the articles

of the bidding entity require that

an affidavit be issued after a

Board approval, then a Board

approval in accordance with the

articles should be obtained and

provided.

Please refer the




No.


amendment, if any

Response

179. Sl No. 1(a)

Name of Mine :

Precambrian Iron

Ore Mine (Schedule

V

Information

Memorandum)

Name of mine mentioned in NIT

dated 22/12/2015 is “Rama Rao

Paol”. Which name should be

used in bid documents?

Name of mine shall be as per NIT

i.e. “Rama Rao Paol” ML No

2621.

180. Documents required

(Tender)

Clause B (1) (d) iv of

Schedule I

Can we get list of documents

required to qualify as End User

Please refer the


181. Schedule I:

Format of Technical

Bid/B (1) (b): The bid

letter must be signed

by a duly authorized

representative of the

Bidder, in case the

Bidder is a company.

Please clarify in case bidder

being Company, which

documents need to signed /

authenticated by authorised

representative only, and / or

which documents can be signed

/ authenticated by other directors

on the Board of the Company,

viz., extract of board Resolution,

Memorandum of Association,

Articles of Association,

Certificate of Incorporation,

Affidavit, Letter of Authority, etc.

To ensure that

documents submitted

during the bid is

properly signed /

authenticated

This is amply clear in the

respective clauses of the Tender

Document.

Please refer the




No.


amendment, if any

Response

182. Schedule I

Point D (1)

Instructions for

submission of Power

of Attorney

Please clarify on which

documents common seal is to be

affixed?

To ensure that

documents submitted

during the bid is

properly signed /

authenticated

Power of Attorney shall be

impressed with the common seal

of the company. Further, all other

documents submitted by the

Bidder must be impressed with the

rubber stamp of the company

(except Bid Security) and duly

initialed/signed on all the pages by

the Authorised signatory.

Please also refer to

Corrigendum/Addendum

183. Schedule I B d iv

Documents to

evidence the

requirements of

minerals for the

specified end use.

Please specify the documents to

submit

Please refer the


184. Clause B 1 (d) (iv)

Documents to

evidence the

requirements of

minerals for the

specified end use.

List of Documents Required. Clarity on Specific

documents required to

evidence end use to be

listed in Tender

document.

Copy of Consent for

Operation issued by

Pollution control

Board & copy of

Excise returns of

Dec-15

Please refer the




No.


amendment, if any

Response

185. Clause 5 (e) Bidder

shall only be a single

entity engaged in the

Specified End Use

and shall not be a

consortium

consisting of more

than one entity.

(tender Document)

List of documents evidencing

single entity to be specified.

Clarity on Specific

documents required to

evidence single entity

and not a consortium to

be listed in Tender

document.

Copy of PAN Card

of the Bidder to be

enclosed as an

evidence for single

entity.

Please refer B. (1) d of Schedule I

of the Tender Document.

Please refer the


186. Clause 13.1.1 ( E )

(a) (Tender

Document): The

extract of

constitutional

documents and

certified copies of

the corporate

approvals must be

enclosed with the

power of attorney.

In respect of board resolution,

whether board resolution should

be specific for each of the mine

or general resolution sufficient

Clarification required Clarification required Board resolution should be

specific for each of the mine.

However, a general board

resolution specifying the mines

the Bidder is bidding for will also

be treated as compliant.

For format of board resolution,

please refer the


187. Schedule 1: clause

B.(d) (iv) (Tender

Document):

Documents to

evidence the

requirements of

What are the Documents

required to evidence the

requirements of minerals for the

specified end-use





No.


amendment, if any

Response

minerals for the

specified end use

188. Schedule I

Clause E.(1)(b)

The affidavit must be

stamped in

accordance with

Applicable

Law.(Tender

Document for Rama

Rao Paol (Mining

Lease - 2621))

Does affidavit need to be

notarized also?

Yes.

189. Page 41 (E) Affidavit It has to be clarified whether

affidavit needs to be notarized.

Yes.

190. Clause 13.1.1

(Tender Document):

Power of Attorney

and Affidavit

It will be useful to clarify whether

the Power of Attorney and the

Affidavit will need to be notarized.

Clarification required Clarification required Yes.


E.(1) (a) (Tender

Document): The

power of attorney

must be issued in

Is it for stamp paper value on

which Affidavit to be printed or

any other law envisaged.

Clarification required Clarification required Affidavit to be printed on Stamp

Paper and same need to be

notarised.



No.


amendment, if any

Response

India in accordance

with Applicable Law

192. Clause 13.3.1(e)

In case of Bidder

being a company,

duly certified copy of

the corporate

authorization, such

as board resolution

to participate in the

tender process and

submit a bid.(Tender

Document for Rama

Rao Paol (Mining

Lease - 2621))

Through a board resolution, a

general power of attorney has

been issued to person A, who is

authorized to give power of

attorney to others. Now Person A

gives power of attorney to Person

B to participate in the tender

process. In such case, we will

submit above mentioned board

resolution, Power of Attorney of

Person A and Power of Attorney

of Person B. We understand, this

will meet the requirement. Please

clarify.

No. The Power of Attorney for

participating in this bidding has to

be in the specific format provided

in the Tender Document. It is

expressly clarified the instructions

mentioned for submission of

Power of Attorney need to be

strictly adhered to.

Please refer the


193. Schedule I

Clause B(1)(c)

The corporate

authorization of the

authorized signatory

of the Bidder (which

is a company) must

be enclosed with the

bid letter. It is

recommended that

the Bidder may

Please clarify:

1. Is the Corporate Authorization

required in addition to the Power

of Attorney?

2. Who should issue the

corporate authorization?

1, 2 & 3) The Authorised

signatory of the Bidder in case of

a company must be the Power of

Attorney holder. The Power of

Attorney should be issued

pursuant to a resolution of the

board of directors in this regard.

For format of board resolution,

please refer the




No.


amendment, if any

Response

authorize one

person to deal with

all matters related to

bid. However, if the

Bidder has

authorized more

than one person,

then the corporate

authorization of all

such persons should

be enclosed. Any

change in such

corporate

authorization must

be immediately

intimated to the

State Government.

(Tender Document

for Rama Rao Paol

(Mining Lease -

2621))

3. Is there any specific format for

such authorization?


D.(1) (a) (Tender

Document): The

power of attorney

must be issued in

Is it for stamp paper value on

which power of attorney to be

printed or any other law

envisaged

Clarification required Clarification required The Power of Attorney must be

issued on stamp paper of

appropriate value. Further, the

Power of Attorney should also be

notarised.



No.


amendment, if any

Response

India in accordance

with Applicable Law

195. Clause 13.7.2

(Tender Document):

The State

Government

reserves the right to

reject any bid, and

appropriate the

entire Bid security if:

Whether the bid document gets

rejected even for minor non

compliances / mistakes

Clarification required Clarification required Refer 13.7.2 (b) of Tender

Document.

196. Schedule I B d iii

[Turnover and net

worth certificate

issued by: (a)

statutory auditors of

the Bidder (which is

a company); or (b) a

chartered

accountant or a

merchant banker

registered with the

Securities and

Exchange Board of

India – in case

Bidder is an

individual.] OR1

Format of Statutory Auditor

Certificate may kindly be shared

Bidders shall submit the

certificate issued by the statutory

auditors as per its own format

with all the details as required

under B. (1) (d) (iii) of Schedule I

of the Tender Document.



No.


amendment, if any

Response

[Certificate regarding

the total amount as

closing cash balance

issued by a

chartered

accountant or a

merchant banker

registered with the

Securities and

Exchange Board of

India.]

197. Tender Document Schedule 1, B (1) (d) (iii)

In case of an Individual whether a

CA certificate is required?

-- Yes. Please refer section

B.(1)(d)(iii) of Schedule I of the

Tender Document, which states

that in case of an individual the

net worth certificate shall be

issued by a chartered accountant

or a merchant banker registered

with the Securities and Exchange

Board of India.

198. Clause 13.1.1 ( E )

(a) (Tender

Document)

Is there any specific format for

Board resolution?





No.


amendment, if any

Response

199. (Tender Document):

Format of bid letter

The bid letter is to be signed with

name and seal of bidder. It is

assumed the seal means rubber

stamp of Company.

Clarification required Clarification required Yes.

Power of Attorney shall be

impressed with the common seal

of the company. Further, all other

documents submitted by the

Bidder must be impressed with the

rubber stamp of the company

(except Bid Security) and duly

initialed/signed on all the pages by

the Authorised signatory.

Please also refer to

Corrigendum/Addendum

Eligibility


Clause No 5

Whether we consider new

expansion plans of our company

for applying the mines and

whether the capacity of proposed

plant shall be considered in the

eligibility if required.

Bidders with only proposed

Specified End Use plant(s) are

not eligible. Please refer Clause 5

(c) of the Tender Document for

the purpose of eligibility.

201. Clause 5(c)

The Concession

1. Can a Bidder submit a bid for a

combination of End Use Plants

Clarification is required

for business decision.

1. Plant B which is under

construction/plant to be



No.


amendment, if any

Response

Area has been

reserved for end-

users engaged in the

production of sponge

iron and/or pig iron

and/or steel and/or

pellets as per the

Judgment (the

“Specified End

Use”). The end

users will include

public sector

undertakings.

(Tender Document

for Rama Rao Paol

(Mining Lease -

2621))

(EUPs)? For example, a single

bid for two EUPs – A and B,

where A is an existing plant and

B is under construction/ planned

to be constructed.

2. Is existing plant of any capacity

eligible? Is the Bidder allowed to

propose any capacity EUP?

3. Suppose Bidder has existing

plant – Plant 1 and submit bid for

this plant. He becomes

successful bidder. In future, the

Successful Bidder construct

another plant – Plant 2.

In such scenario, can the

Successful Bidder use mineral

from the same mine in Plant 2

also?

constructed is not eligible. The

Bidder owning the existing plant A

for production of sponge iron


pellets is eligible to bid.

2. There is no capacity based

restriction on the Specified End

Use plants. The only restriction is

that the mined iron ore be used

for the Specified End Use by the

Bidder himself in a plant owned

by the bidder.

3. Yes the Successful Bidder can

use mineral from the same mine

in Plant 2 also, provided the

Successful Bidder is engaged in

the production of sponge iron


pellets in Plant 2, which too shall

be directly owned by the same

Successful Bidder.






No.


amendment, if any

Response

4. Can minerals from the mine

allocated to one entity be used in

specified end use plant of

another entity, where both

entities have common

promoter(s).

5. Can minerals from the mine

allocated to an entity at one

location be used in specified end

use plant of the same entity at

another location in future?







mineral for Plant 2 also.

4. No. The mine allocated to the

Successful Bidder is for use by

that Successful Bidder only in the

production of sponge iron and/or

pig iron and/or steel and/or pellets

in his own plant.

5. Yes, provided the Successful

Bidder himself is engaged in the



from iron ore in the plant at

another location in future and this

plant is directly owned by the

Successful Bidder. Provided

further that the Successful Bidder

shall seek prior approval of the

State Government of Karnataka



No.


amendment, if any

Response

by providing relevant details in

that regard. Provided also

that the Successful Bidder

continues to adhere to the



mineral for the Specified End Use

plant at another location.

Please refer the


202. General If prospective plant will be

commissioned in future by the

successful bidder, whether ore

from these mine can be used for

captive purpose in that plant?

Yes, provided the Successful

Bidder himself is engaged in the



from iron ore in such plant in

future. Provided further that the









mineral for the plant in future.



No.


amendment, if any

Response

Please refer the


203. Clause 5 (c)

The Concession

Area has been

reserved for end-

users engaged in the



and/or steel and/or

pellets as per the

Judgment (the

“Specified End

Use”). The end

users will include

public sector

undertakings.

Tender Document

(a) The clause reads that the users engaged in production of sponge and/or Pig Iron and/or steel and/or pellets can participate in the auction.

Kindly clarify whether the

Bidder should have existing

operating end use or

proposed end users are also

eligible to participate in the

auction.

(b) Please clarify on following:

• Confirm whether the


allowed to consume mineral

in the same end use plant in

case of expansion of the

same;

• Also, if a company shall be

allowed to divert the mineral

to its other plants/units in

Setting up of a new

steel/pig iron/pellet plant

have construction

period of more than 18

months which is time

allowed for signing of

mining lease

This is also in line with

the provisions of Coal

Auctions conducted by

Government of India

where companies with

plants under

construction having

made certain specific

level of investments

were allowed to

participate in the auction

Further, it should be

clarified in the bid

document whether

Bidder need to consume

the ore in the End Use

a) Please refer Clause 5 (c) of the

Tender Document. As per

Hon’ble Supreme Court

Judgment only the end users

engaged in production of sponge

iron and/or pig iron and/or steel

and/or pellets will be eligible to

take part in the auction. Bidders

with proposed end use plant(s)

are not eligible.

b) The Successful Bidder can

use the mineral from the mine for

which it has got mining lease in

case of expansion of the

Specified End Use plant or to its

other plant engaged in Specified

End Use that is directly owned by

the Successful Bidder himself.








No.


amendment, if any

Response

case the End User Company

is same.

Unit declared in the Bid

or ore can be diverted to

any other plant/unit

owned by Bidder.

In case of Coal

Auctions, utilisation of

the coal in other

plants/unit was allowed

however MMDR

Amendment Act,

Mineral Auction Rules

and tender documents

are silent on this matter.





mineral in the expansion or the

other plant.

Please refer the



Clause 5

The provisions of Clause 5 only

state the eligibility of a company

or individual to participate in the

Auction. However, with regard to

bidding entity, tender document is

silent on following issued:

1) Can a Subsidiary as well as

Parent company who both are

eligible on their own allowed to

1. Yes, both the subsidiary as

well as the parent company can

bid for the same mine

independently subject to each

meeting the eligibility criteria

independently provided that both

the subsidiary company and the

parent company cannot bid for a

mine for the same Specified End

Use plant. Also, if the subsidiary

company has used the net worth

of the parent company/holding



No.


amendment, if any

Response

bid for the same mine

independently?

2) Can two companies who are

affiliate (wherein the same

management holds 20% or more

shareholding) to each other as

per Companies Act 2013 allowed

to participate in the auction of

same mine independently?

company for eligibility purpose,

both the subsidiary company and

the parent/holding company

cannot bid for the same mine

even if the Specified End Use

plants are different in such case.

It is expressly clarified that in

such event the bids of both the

subsidiary company and the

parent company/holding company

shall be rejected.

It is amply clarified that a parent

company or holding company

cannot bid for a mine for a

Specified End Use plant owned

by its subsidiary company. In

such case, only the subsidiary

company shall be eligible to bid

for its plant engaged in the

Specified End Use.

2.Yes, two companies who are

affiliate to each other as per the

Companies Act can participate in

auction of the same mine

independently provided their




No.


amendment, if any

Response

3) Can companies with

substantial common

shareholding participate in the

auction of same mine

independently?

different and subject to each


independently.

3.Yes, companies with substantial

common shareholding can

participate in auction of the same

mine independently provided their


different and subject to each


independently.

Please refer the


205. Clause 5 (C) The

concession Area has

been reserved for

end users engaged

in the production of

sponge iron and / or

pig iron and/or steel

and/or pellets per

the judgement (the

“Specified End use”).

The end users will

include public sector

The Clause does not distinguish

between “existing end users” and

“proposed end users” thus it is

construed as both are eligible for

participation in the bidding

process.

Since the “proposed

end use plant” shall

have longer gestation

period than the

stipulated 18 months

provided for mine

development, a

clarification on these

lines may be provided.

Please clarify what

constitutes

“proposed end use

plants” in terms of

landmarks achieved.

What shall be the

time frame for

development of

“proposed end use

plant”? Obviously

the development

period of mine has

As per Hon’ble Supreme Court

Judgment only the end users

engaged in production of sponge

iron and/or pig iron and/or steel

and/or pellets will be eligible to

take part in the auction. Bidder

has to confirm that he is eligible

as per this eligibility condition by

submitting document as

contained in clause B 1 (d) (v) of

Schedule I of the Tender

document. Bidders with proposed



No.


amendment, if any

Response

undertakings (model

Tender Document)

to synchronise with

the development

and commissioning

of “proposed end

use plant”.


not eligible.

206. Clause No.5 (c),

Eligibility Criteria

In Eligibility Criteria Clause No.5

(c), it is mentioned that "....end-

users engaged in the production

of sponge iron and/or pig iron

and/or steel and/or pellets as per

the Judgement.....

Since the end-users engaged in

production of steel are also

included, who cannot use iron ore

directly. The steel producers

need to convert iron ore-fines to

pellets and then DRI and then

Produce steel.

So the steel producers need to

convert iron ore into pellet / DRI

before using it in steel making.

Hence the steel producers must

be given chance to convert iron

ore into Pellet/DRI at some other

facility and then use them for

It may be noted that “pellets” is

one of the eligible Specified End

Use. It is expressly clarified that

the Bidder must produce pellets

in his own plant and not in some

other facilities/plants.

Please refer to clause B (1) d) iv)

of Schedule I of the Tender

Document along with

Corrigendum/Addendum issued

in this regard.



No.


amendment, if any

Response

steel making.

Request please look into this

make suitable amendment so

that steel makers can use the

iron ore after converting them to

Pellet/DRI at suitable facilities.


Clause 5

The Notice Inviting Tender

document says “Only the end

users engaged in production”

meaning new companies

planning or having approval of

steel projects but presently are

not engaged in production, but

are in the project planning stage

and would be in future engaged

in production are not eligible for

bidding, to be confirmed.

Bidders with proposed Specified

End Use plant(s) are not eligible.

208. Clause 5 (c) (Tender

Document): The

Concession Area

has been reserved

for end-users

engaged in the



and/or steel and/or

Please clarify whether the public

sector undertakings eligible to bid

for the Concession Area will

include only those public sector

undertakings which are engaged

in the Specified End Use or

whether public sector

undertakings such as National

Mineral Development Corporation


required

Only those public sector

undertakings which are engaged

in the production of sponge iron


pellets will be eligible to take part

in the auction.



No.


amendment, if any

Response

pellets as per the

Judgment (the

“Specified End

Use”). The end

users will include

public sector

undertakings

which are not engaged in the

Specified End Use can also

participate.

209. Tender Document Clause 5 (b) 1 Explanation 2 and 3

Kindly clarify Point No. 5 Eligibility sub point (b) explanation under this SI. No. 2 & 3?

These clauses are self-explanatory.

210. MDPA Clause 8 In our case will establish the

Pellet plant in two years’ time can

we get any exemption in penalty

_______on minimum quantities .

No.

Please refer eligibility criteria as

per section 5 of the Tender

Document.



prevail.

211. In the notice inviting tenders

referenced above, it is clearly

stated that consortium bidding

shall not be allowed. Such a

condition is tailor made to help

bigger players and my lead to

monopolization and vesting of

As per the order of the Hon’ble

Supreme Court in Samaj

Parivartana Samudaya and Ors.

vs. State of Karnataka and Ors,

W.P. (C) 562 of 2009 dated 30

July 2015, a Bidder shall only be

a single entity engaged in the



No.


amendment, if any

Response

power in hands of very few

wealthy capitalist corporations.

Such disallowance of consortium

bidding puts the smaller units at a

disadvantage and thereby

curbing the power of smaller

secondary sector units. Such a

monopolization has been seen in

the cement industry which led to

increase in cement rates making

it unaffordable for financially

weaker sections of the society to

attain their cherished dream of

owning an RCC house. Such

monopolization in cement

industry was subsequently

admonished and severely

penalized by the Competition

commission of India. We are of

the opinion that such efforts to

monopolize sponge iron industry

will lead to disastrous effects on

the industry as we believe that

such corporations will not be

sensitive to the needs of the

majority of the population and

shall severely affect the rural

empowerment objectives of the

Specified End Use and shall not

be a consortium consisting of

more than one entity.



No.


amendment, if any

Response

Government. We hope that the

situation in the sponge iron

industry is salvaged before it

becomes impossible to revive the

industry. We sincerely urge you

to allow consortium bidding from

the e-auction.

212. Clause 8.1 A (e)

The Technically

Qualified Bidders

shall be ranked on

the basis of the

descending initial

price offer submitted

by them. On the

basis of such

ranking the

Technically Qualified

Bidders, holding first

fifty per cent of the

ranks (with any

fraction rounded off

to higher

integer) or the top

five Technically

Qualified Bidders,

whichever is higher,

1. If a company submits two bids

through its two subsidiary/

associate companies, will it be

treated as two bids?

2. Multiple bids submitted through

different

group/subsidiary/associate

companies should be treated as

one bid for ranking of Technically

Qualified Bidder.

If multiple bids

submitted through

group/subsidiary/associ

ate companies are not

treated as one bid, it

may reduce competition

by reducing the number

of other companies in

top 50%

1. A parent company or holding

company cannot bid for a mine

for a Specified End Use plant

owned by its subsidiary/

associate company. In such case,

only the subsidiary/ associate

company which owns the plant

shall be eligible to bid for its plant

engaged in the Specified End

Use.

However, two companies who are

affiliate to each other as per the

Companies Act can participate in

auction provided that the

Specified End Use plants owned

by them are different and subject

to each meeting the eligibility

criteria independently.

Also, the subsidiary as well as the

parent company can bid



No.


amendment, if any

Response

shall be considered

to be qualified for

participating in the

second round of

online electronic

auction (the

“Qualified Bidders”)

individually subject to each


independently and provided that

both the subsidiary company and

the parent company shall own

different Specified End Use plants

on basis of which they are

submitting the bids.

Also, if the subsidiary company

has used the net worth of the


for eligibility purpose, both the


parent/holding company should

not bid for the same mine even if

the Specified End Use plants are

different in such case. It is

expressly clarified that in such

event the bids of both the



shall be rejected.

It is also expressly clarified that a

Bidder shall submit only one bid

for a mine. In case a Bidder

submits multiple bids for a mine,

even if these are for its/his

different Specified End Use



No.


amendment, if any

Response

plants, all such bids will be

rejected.

2. Ranking of technically

qualified bidders shall be done as

per clause 8 of the Tender

Document.

Mining Lease

213. The total reserves identified in

each mine are to be produced in

20 years or 50 years, as the

mining lease is to be allotted for

50 years.

What will be the compensation, if

reserve identified do not

materialize as predicted.



final R&R Plan.

No compensation can be made. It

is a business risk, which needs to

be assessed by the bidder.


Tender Document.

214. Clause 18.2 Term

(Mine Development

and Production

Agreement)

Term of Mining Lease. Clause 2 of Section 8A

of Mines and Minerals

(Development and

Regulation) Act, 1957

As amended upto

27.03.2015 specifies all

mining leases shall be

The period of

validity of the Mining

Lease granted to the

Successful Bidder

shall be 50 Years

(“Term”).


50 years as per the MMDR Act.



No.


amendment, if any

Response

granted for the period of

fifty years.

215. 2.7 ESTIMATED

IRON ORE

RESERVES BASED

ON M/s. MECL

REPORT

(Provisional R & R)

Permitted period of mining 20

years or 50 years

The MMRD Act

provides for 50 years

lease for auctioned

mines but R & R is

prepared for 20 years

The feasible annual

production capacity

based on mineable

reserves for next 20

years.





R&R Plan.

216. Clause 2.7 of R&R

of ML 2487 page no.

30 (Provisional

R&R): Hence

11977676 tonnes or

say 11.98 million

tonnes of reserves

may be considered

for arriving at the

feasible annual

production capacity

based on reserves

for next 20 years.

What would be the mining lease

period. In ML 2487, R&R

mentions of 20 years & it is silent

for all other mines which are put

up for auction.

The figures on provisional annual

production is not available

It helps in

understanding the

annual production &

eligibility criteria

Feasible indicative

annual production

figures should have

been provided on all

R&Rs

As per the MMDR Act, the grant

of lease is for 50 years.















No.


amendment, if any

Response









MSTC’s portal.









Plan.

217. 10.4

Grant of Mining

lease (Tender

Document): The

date of the

commencement of

the period for which

Under Section 8A of the Mines

and Minerals (Development and

Regulation) Act,2015, all mining

leases in relation to minerals

other than those covered under

Part A and Part B of the First

Schedule are to be granted for a

period of 50 years. Iron Ore is


required

Period of grant of mining lease

shall be 50 years as per MMDR

Act.



No.


amendment, if any

Response

a mining lease is

granted shall be the

date on which a duly

executed mining

lease is registered.

listed under Part C of Schedule I

of the Mines and Minerals

(Development and Regulation)

Act, 2015 and the provisions of

Section 8A above would be

applicable to mining leases in

relation to excavation of iron ore.

Please confirm whether the

mining leases for

Lakshminarayan Mining Co.

(Mining Lease - 2487), Rama

Rao Paol (Mining Lease - 2621),

Karthikeyas Manganese (Mining

Lease - 2559) and Hothur

Traders (Mining Lease - 2313)

would be granted for 50 years

218. (Tender Document) What happens in case of Merger

& acquisition of the company post

allotment of mines. Whether

mining lease will also be

transferred in the name of new

merged / acquired company

Clarification required Clarification required Transfer of mine shall be

governed by the provisions of the

MMDR Act.


Clause

10.4

How much mining lease Period

allowed - 20 or 50 years

As per the MMDR Act, the grant

of lease is for 50 years.



No.


amendment, if any

Response

220. Clause 18.2.

This Agreement

shall commence on

the date mentioned

in Clause 18.1 and

shall continue for the

period of validity of

the Mining Lease

granted to the

Successful Bidder

(“Term”).(Mine

Development and

Production

Agreement)

1. What will be the period of

mining lease?

2. Will it be co-terminus with the

life of mine?

3. Will it be for 50 years as per

section 8A (2) of the Mines and

Minerals (Development and

Regulation) Act?

1, 2 &3. As per the MMDR Act,

the grant of lease is for 50 years.

221. Clause 18.2.

This Agreement

shall commence on

the date mentioned

in Clause 18.1 and

shall continue for the

period of validity of

the Mining Lease

granted to the

Successful Bidder

(“Term”).

a. Pursuant to the section 8A (2)

of the Mines and Minerals

(Development and Regulation)

Act, the term of mining lease

shall be 50 years. Please clarify

the period of Mining Lease for

each of the 14 mines.

b. What shall be the period for

which R & R plan is to be

prepared by the successful

bidder – 20 years or 50 years?

Supreme Court in its

order on Karnataka iron

ore mines has stipulated

that annual capacity of a

mine shall be minimum

of:

• mineable resources divided by 20 years;

• Carrying capacity of road;

• Dumping capacity in mines;

a. Mining Lease will be granted

for 50 years as per the MMDR

Act. .

b. It is the responsibility of the







No.


amendment, if any

Response

Since Clause 8A (2) of

new MMDR amendment

act has the ML period

for 50 years, the

Government should go

back to SC and suggest

that R & R plan should

be for 50 years.
















MSTC’s portal.









Plan.

222. Tender

Document/MDPA

The Total Reserves identified in

each mine are to be produced in





No.


amendment, if any

Response

20 years or 50 years, as the

mining lease is to be allotted for

50 years

However production shall be as

per the final R&R Plan and

approved Mining Plan.

Minor Mineral/Major

Mineral

223. Clause 8.2

The mining lease

shall be for Mineral

found in the area

pursuant to

exploration prior to

the e-auction:

Provided that where,

subsequent to the e-

auction, any new

mineral is

discovered, then the

holder of mining

lease shall follow the

provisions of the

Mineral Concession

Rules, 1960 for

inclusion of such

new mineral in the

Mining Lease Deed.

Where, prior to the

e-auction or

1. Please clarify, how will minor

mineral be dealt?

2. What will be the obligation of

successful bidder in respect of

minor mineral?

3. In case the Successful Bidder

has no requirement for minor

mineral(s), can it leave the minor

mineral(s) unmined?



1. Minor mineral shall be dealt

with as per Rule 10 (8) of the

Mineral (Auction) Rules, 2015

2. & 3. It shall be as per Karnataka Minor Mineral Concession Rules 1994 framed under section 15 of MMDR Act.



No.


amendment, if any

Response


auction, presence of

minor mineral is

established or

discovered, such

minor minerals shall

be dealt in

accordance with

such rules made by

the State

Government under

section 15 of the Act.

(Tender Document

for Rama Rao Paol

(Mining Lease -

2621))

224. Clause 8.4

State Government to

prescribe the

manner in which the

minor mineral would

be extracted and

payments related

thereto in

consonance with

rules made by the

State Government

State Government should

prescribe the manner in which

the minor mineral would be

extracted and payments related

thereto in the tender document

itself.



It shall be as per Karnataka Minor

Mineral Concession Rules 1994

framed under section 15 of

MMDR Act.



No.


amendment, if any

Response

under section 15 of

the Act. (Tender

Document for Rama

Rao Paol (Mining

Lease - 2621))

225. Clause 8.2

Tender Document

The mining lease

shall be for Mineral

found in the area

pursuant to

exploration prior to

the e-auction:

Provided that where,


auction, any new

mineral is

discovered, then the

holder of mining

lease shall follow the

provisions of the

Mineral Concession

Rules, 1960 for

inclusion of such

new mineral in the

Mining Lease Deed.

Please clarify the modalities of

mining of any new major or

minor mineral discovered during

exploration & mining /using any

new mineral in case such

presence is found after the e-

auction process completes.

Mining of any new major mineral

found after the e-auction process

shall be dealt with as per Mineral

(Auction) Rules 2015.

Minor mineral shall be dealt with

as per Rule 10 (8) of the Mineral

(Auction) Rules, 2015



No.


amendment, if any

Response

Where, prior to the

e-auction or


auction, presence of

minor mineral is

established or

discovered, such

minor minerals shall

be dealt in

accordance with

such rules made by

the State

Government under

section 15 of the Act.

Clause 8.4

State Government to

prescribe the

manner in which the

minor mineral would

be extracted and

payments related

thereto in

consonance with

rules made by the

State Government

under section 15 of

the Act.



No.


amendment, if any

Response

Despatch/Payments/

Annual Payments

226. MDPA Clause 8.1

Production cap is yearly cap -

whether Successful bidder can

despatch more than production

in any subsequent year.

The production and despatch

requirement shall be as per the

Tender Document and MDPA.

227. Clause 7.1.4

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. The Annual

Payment, as may be

applicable, is

required to be made

within 20 calendar

days of expiry of

each financial

year.(Mine

Development and

Monthly Payment is required to

be made with respect to mineral

extracted or mineral despatched?

Except in clause 7.1.4, the

monthly payment has to be made

with respect to mineral

despatched. Please clarify.

Monthly payment is required to be

made with respect to mineral

despatched.

Please refer the




No.


amendment, if any

Response

Production

Agreement

228. (a) As per Supreme Court

directive as well as Clause 8.1 of tender document, Minimum Annual Despatch requirement is mentioned as 50%. However in Schedule E, it is mentioned that in case actual production is below 75%, then penalty shall be levied.

The provision is in contradiction

to the definition of Minimum

Annual Despatch as well as SC

order which envisage minimum

despatch at 50% only. Hence no

penalty should be imposed till

production is above 50% of the

capacity.

Further, Penalty on Annual

Production Required falling below

75% of prescribed under R & R

gets triggered only after 36

months from the date of LOI. Out

of this 18 months are provided for

obtaining clearances. Hence

effectively Bidder is getting only

flexibility for 18 months. The

(a) and (b) The provisions of

Tender Document and MDPA

along with the

Corrigendum/Addendum are not

in conflict with Hon’ble Supreme

Court judgment.



No.


amendment, if any

Response

period should be 36 months from

grant of mining lease.

(b) Further, as per provisions, penalty on Minimum Annual Despatch Requirement falling below 50% of required production gets triggered immediately after commencement of mining which is again in contradiction to the period allowed for no penalty.

229. Clause 7.1.4

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. The Annual

Payment, as may be

applicable, is

required to be made

within 20 calendar

days of expiry of

each financial year.

There is an ambiguity in the

payment terms as this clause

refers for monthly payment with

respect to mineral extracted

however entire tender

documents refers for mineral

dispatch

For clarity of tender

terms

It should be based

on actual value of

mineral despatched.

Monthly Payment shall be

computed on the basis of the

Value of Mineral Despatched.

Please refer the




No.


amendment, if any

Response

230. Clause 8 &

schedule E –

Production &

Despatch

Requirement

Annual Production

Requirement of 75%

& Minimum

despatch

Requirement for a

year, shall be 50%

of production

requirement to be

achieved every year

These two requirements cannot

go together. Since the minimum

despatch requirement is 50% of

the annual production, how could

the minimum production

requirement be 75%?

There is no mention

about the 75%

production requirement

either in the auction

rules or Supreme court

order. Both Annual

Production requirement

and Minimum Annual

Despatch Requirement

should be 50%

Also, If a miner attracts

penalty for annual

despatch falling below

50% how he can be

penalised for annual

production falling below

75%?

Under the existing

provisions, a miner has

to essentially produce

75% of annual

production but he is

allowed to despatch

50% of annual

production. The net

effect of the two

combined provisions is

that a miner has to


Document and MDPA along with

the Corrigendum/Addendum shall

apply.



No.


amendment, if any

Response

despatch 75% of annual

production, which is

against the Auction

Rules 2015.

231. Page - 20 (12.2)

A holder of mining

lease shall make

such payments as

specified in rule 13

of the Auction Rules.

It is clarified that the

holder of mining

lease shall make

monthly payments

with respect to the

Value of Mineral

Despatched. The

holder of mining

lease shall also

make annual

payments if the

actual annual

despatch is lower

than the Minimum

Annual Despatch

Requirement. It is

expressly clarified

Is there any set off provision for

Minimum Annual Despatch

(MAD) Requirement? Suppose,

in case MAD requirement not

met in 1st year or any year

subsequently. Then shortfall can

be set off with higher despatch in

subsequent year.

There is no such set off provision.

Please refer Clause 7 and 8 of

MDPA. Also refer Schedule E of

MDPA.



No.


amendment, if any

Response

that the Upfront

Payment paid by the

Successful Bidder

shall not be adjusted

against the amount

payable pursuant to

such annual

payments.

232. Page - 66 (7.1.2.c)

Price to be applied

for shortfall quantity:

the average of the

monthly Average

Sales Price

(Karnataka State)

published by IBM for

the grade arrived at

(b) above by lumps

and fines for the

financial year shall

be considered for

the purpose of

calculation of

payment related to

Minimum Annual

Guaranteed

Despatch.

Last para, basis for 50:50 ratio

for Lump and Fines to be

provided. Normally, in mining

operation 65-70% fines and 30-

35% lump is being produced. We

feel ratio should be accordingly.

The ratio of lumps and fines at

50:50 will be considered for the

purpose of calculation of shortfall

quantity in case of no production

after the grant of mining lease.

Please refer Clause 7.1.2 of

MDPA for more details.



No.


amendment, if any

Response

Provided in case of

no production during

a financial year,

lumps: fines ratio, as

per despatches in

the preceding year

will be considered

for treatment of

shortfall quantity by

lumps and fines, in

such financial year.

The weighted

average grade of ore

taken separately for

lumps and fines in

the preceding year’s

despatches will be

respectively

considered for the

shortfall quantity of

lumps and shortfall

quantity of fines for

the financial year

with no production.

However, price to be

applied for the

shortfall quantity

shall be based on



No.


amendment, if any

Response

average of the

monthly Average

Sales Price

(Karnataka State)


the concerned grade

for the financial year

with no production

for the purpose of

calculation of

payment related to

Minimum Annual

Guaranteed

Despatch.

Provided further in

case of no

production after the

grant of mining

lease, average

grade in the

geological report

shall be considered

with lumps to fines

ratio at 50:50.

Further, the price to

be applied for the

shortfall quantity

shall be based on



No.


amendment, if any

Response

average of the

monthly Average

Sales Price

(Karnataka State)


the concerned grade

for the financial year

with no production

for the purpose of

calculation of

payment related to

Minimum Annual

Guaranteed

Despatch.

233. Clause 8 &

schedule E –

Production &

Despatch

Requirement

Annual Production

Requirement of 75%

& Minimum

despatch

Requirement for a

year, shall be 50%

of production

requirement to be

These two requirements cannot

go together. Since the minimum

despatch requirement is 50% of

the annual production, how could

the minimum production

requirement be 75%?

If a miner attracts

penalty for annual

despatch falling below

50% how he can be

penalised for annual

production falling below

75%?

Under the existing

provisions, a miner has

to essentially produce

75% of annual

production but he is

allowed to despatch

Both Annual

Production

requirement and

Minimum Annual

Despatch

Requirement should

be 50%




apply.



No.


amendment, if any

Response

achieved every year

(Model Tender

Document, Mine

Development &

Production

Agreement)

50% of annual

production. The net

effect of the two

combined provisions is

that a miner has to

despatch 75% of annual

production, which is

against the Auction

Rules 2015.

234. MDPA Clause 4

and Schedule E

The performance security to the


the despatches are more than

50% and less than 75% of

production requirement. Whether

25% of performance security will

be invoked irrespective of

despatches achieved i.e. same










the actual production in a financial

year is lower than 50%, 25% of

the Performance Security shall be

invoked (irrespective of the level

of production achieved below

50%) in addition to the Annual

Payments that the Successful

Bidder is liable to pay for the

Minimum Annual Dispatch

Requirement.



No.


amendment, if any

Response


Addendum.

235. MDPA Schedule E Whether 50% dispatches is ore,

lumps & fines ratio or lumps and

fines 50% of the total dispatches.

There is no mandatory ratio to be

maintained in terms of despatch

for lumps and fines. Actual annual

despatch shall be based on the

sum total of fines and lumps

despatched during the year.

236. If the actual

production in a year

is lower than 75%

but greater than

50% of the

Production

Requirement, as

mentioned in the

Schedule - E, 25%

of the Performance

Security shall be

invoked

(SCHEDULE E -

Production and

Despatch

Requirement of Mine

Development and

Whether the recovery is

proportional to the shortfall

quantity or fixed for the shortfall

below 75%.

Such per cent of the

Performance Security

will be invoked which is

equal to shortfall

quantity below 75% of

Production requirement.

Whether 25% of

performance

security will be

invoked irrespective

of despatches

achieved i.e. same

from 51% to 74%, or

it will be proportional

to the short fall in

















Requirement.



No.


amendment, if any

Response

Production

Agreement)


Addendum.

237. MDPA Clause 5

and Schedule E

The performance security to the


the despatches are more than

50% and less than 75% of

production requirement. Whether

25% of performance security will

be invoked irrespective of

despatches achieved i.e. same



















Requirement.


Addendum.



No.


amendment, if any

Response

238. Model MDPA

Clause 7.1.2

Treatment of

shortfall quantity –

(a) Basis for Lumps

& fines ratio -

Actual quantities of

lumps and fines

despatched in a

financial year

Basis for the grade

of ore for the

shortfall quantity -

Respective weighted

average grade of ore

for lumps and fines,

which is further

based on the

quantities and

corresponding grade

As the basis for arriving at the

value of shortfall quantity

depends on the lumps and fines

ratio and the weighted average of

the grade of ore for lumps and

fines actually despatched in a

financial year, we seek

clarification on whether there will

be a Nodal Officer/agency of the

State Government which will

oversee and certify the grade of

ore and the lumps & fines ratio

for each lot of material

despatched from the captive

mine to the steel plant or it will be

based on the details shared by

the lessee, the lumps and fines

ratio or grade of ore will be

calculated by the State

Government or will the grade

provided by MECL report will be

final and binding.

Accounting for production shall be

dealt with as per the Applicable

Law and extant rules and

procedures of the State Govt.

Please refer clause 7.1.2 of

MDPA for calculation of shortfall

quantity.



No.


amendment, if any

Response

of lumps and fines

actually despatched

in the financial year

239. Model MDPA

Clause 7.1.4

Lessee has to make

monthly payment

within 20 calendar

days of expiry of

each month with

respect to the

Mineral extracted

from such lease

area in such

calendar month.

As the value of the mineral

despatched should be arrived

after considering the sale price of

the mineral (grade-wise and

state-wise) as published by

Indian Bureau of Mines for such

month of despatch, based on our

current experience we are seeing

the delay from Indian Bureau of

Mines in publishing the price of

the ore, in such case, how the

value of the mineral despatched

will be arrived by the lessee for

disbursing his monthly payments.

Whether still the lessee has to

pay interest where he is at no

fault. Clarity may be given on the

methodology to be adopted on a

permanent basis.

Initially, payment shall made as

per the latest IBM declared

monthly sale price. Differential

payment adjustment shall be

made for the particular month

once IBM publishes sale price for

that particular month.

240. The penal interest stipulated at

24 % for delays / defaults in

payments scheduled. This

The Mineral (Auction) Rules 2015

provides for the applicable

interest rate and cannot be



No.


amendment, if any

Response

interest rate is too high and not

in line with prevailing banking

rates. Suggest that instead of a

penalty for delay/default

of payments, bidders may be

asked to pay a reasonable 12/13

% as late payment fees

modified by the State

Government. Please refer Clause

14 of The Mineral (Auction) Rules

2015.

241. Clause 7.1.6

25% of the Monthly

Payment and Annual

Payment (as may be

applicable) shall be

disbursed to the

SPV, being the

special purpose

vehicle setup for

carrying out the

Comprehensive

Environment Plans

for the Mining

Impact Zone.”

1) We understand that Bidder’s

total obligation is limited to the

percentage of Mineral Value

quoted by bidder. The 75% and

25% is only the proportion in

which Monthly Payment and

Annual Payment need to be

credited in two different accounts

(25% into SPV account). No

additional payment Bidder is

required to make.

2) Please clarify that Category C

lessee won’t be required to make

further 10% contribution to SPV.

Bidders overall liability and

payment should be clearly

spelled out.

The Supreme Court of

India in its order did not

provide any directive on

SPV contribution from

Category C iron ore

mines. Therefore, we

understand that

successful bidder

should not be asked to

pay contribution towards

SPV over and above the

Monthly Payments

under MDPA.

1) The Successful Bidder needs

to make payments as per Clause

7 of the MDPA.

2) The Successful Bidder would

not be required to make further

10% contribution to SPV.

However it is expressly clarified

that any

taxes/duties/royalty/fees/amounts

and charges shall be as per

Applicable Law.



No.


amendment, if any

Response

242. Tender

Document/MDPA

Lumps and fines ratio is not

mentioned anywhere in the

Tender Document which is the

very important factor for all future

payments. It is to be clarified if

the actual payment will be made

based on the actual quantity of

Iron Ore Fines & Lumps

dispatched or any specific

restrictions on the quantity of

ratio of Fines & Lumps.

As the declared price of

Lumps & Fines by IBM

is different for same

grade, so clarification is

required for production,

dispatch & royalty

payment

Indicative Lumps &

Fines recovery ratio

should be

mentioned in

MDPA.







243. Page - 66 (7.1.5)

All payments

required to be made

by the Successful

Bidder shall be

made net of all

applicable Taxes. In

the event, Taxes are

payable, the

Successful Bidder

shall gross-up the

amount payable and

make payment of

the aggregate

amount.

This needs to be clarify further. If

govt. put any taxes on mining in

future, then how to address this.

Currently, what are the taxes

applicable. Suppose, in future

IBM declare price inclusive of

some taxes like DMF or may be

some other taxes, then how to

address such situation.

In additions to payments under

the Tender Document and MDPA,

the Successful Bidder needs to

pay such other amounts/ charges/

taxes/ fees/ duties/royalty, as may

be required under Applicable

Law.



No.


amendment, if any

Response

244. Information

memorandum

In the Information of

Memorandum, the average Fe

content has been mentioned.

However, the premium to be paid

is to be clarified if the payment is

to be made on the actual Fe

content of the material

dispatched or on the basis of

average Fe content as mentioned

in the Information of

Memorandum.

Similarly, with regards to the ratio

of Fines & Lumps, it is to be

clarified if the actual payment will

be made based on the actual

quantity of Iron Ore Fines &

Lumps dispatched or any specific

restrictions on the quantity of

ratio of Fines

& Lumps.

Monthly Payment shall be based

on the mineral despatched in a

month. Please refer Clause 7 of

MDPA.







245. IBM Rate: All the premium

payment is linked towards the

rates published by the IBM on

monthly basis (grade-wise , state-

wise). At present, our observation

is that IBM rates are not

indicating the true market rates


Document and MDPA are based

on the Mineral (Auction) Rules

2015.



No.


amendment, if any

Response

and in many cases the rates for

Fe content 58-60%, 60-62%, 62-

65% are all same. Request you

to find out a suitable mechanism

by which the DMG, Government

of Karnataka will send the

monthly average prices for Fines

& Lumps for different grades to

the IBM which shall be taken as

the basis for the payment of

premium.

The comments/suggestions are

not the subject of the Tender

Document.

246. The penal interest stipulated at

25% for delays/ defaults in

payment scheduled. This interest

rate is too high and not in line

with prevailing banking rates.

Suggest that instead of penalty

for delays/ default in payments,

bidders may be asked to pay a

reasonable 12/13 % as late fees.

The penal interest has been

specified in accordance with


247. Clause 7.1.5 of

MDPA: All payments

required to be made

by the Successful

Bidder shall be

made net of all

applicable Taxes. In

For captive mines, what would be

the base price for levies like

Royalty, DMF, NMET etc. The

second sentence, "in the event,

taxes are payable, the successful

bidder shall gross-up" required

clarity. Under what circumstances

To bring greater clarity For captive mines,

the applicable taxes

will be levied on the

basis of IBM prices /

etc.,

Royalty, DMF and NMET are

payable as per provisions of the

MMDR ACT and Rules framed

thereunder; and other applicable

taxes/ amounts/ duties/ royalty/



No.


amendment, if any

Response

the event, Taxes are

payable, the

Successful Bidder

shall gross-up the

amount payable and

make payment of

the aggregate

amount

this situation will come up. Is it in

case taxes are payable by State

Govt on behalf of the successful

bidder, this condition apply.

fees/ charges and cess are

payable, as per Applicable Law.

248. Clause 12.2 (Tender

Document):It is

clarified that the

holder of mining

lease shall make

monthly payments

with respect to the

value of mineral

despatched

Which month average price will

be applicable for calculating

dispatch value. Presently IBM

declares once in a quarter.

Clarification required Clarification

required

Initially Payment shall made as

per the latest IBM declared

monthly sale price.

Differential payment adjustment

shall be made for the particular

month once IBM publishes sale

price for that particular month.

249. MDPA Clause 8

and Schedule E

Hon’ble Supreme Court has laid

down minimum 50% of

production and dispatch whereas

the Tender document schedule E

page 80, the performance

Security will not be invoked if the

actual production in a year is

atleast 75% of the production

requirement. If the actual

production in a year is lower than




apply.



No.


amendment, if any

Response

75% but greater than 50% than

25% of the performance security

will be involved –After 36 months

of the date of issuance of letter of

intent paragraph 8.3, page 64

Non compliance with production

requirement exceeds more than

seven instances, Right to State

Government to determine lease

without preferdice to any other

proceedings to be taken against

the mining lease holder.

250. MDPA Clause 7.1.2 In State of Karnataka why 50% :

50% ratio of Iron Ore Lumps and

Iron Ore Fines to be considered

for pricing. Here the ratio is 30%

Iron Ore Lumps and 70% Iron

Ore Fines which should be

considered.







MDPA for more details

251. MDPA Clause 7 The ratio of lumps and Fines are

fixed 50:50 whereas in actual fact

30% Lumps and 70% fines are

generated during production










No.


amendment, if any

Response

252. General In case there is a delay in starting

the mines for want of permission

etc and in cases which are

beyond the control of the lease

holder how the minimum

guaranteed 50% amount will be

dealt with.

The provisions of the Tender


Corrigendum/Addendum shall

apply.

IBM Prices/Selling

Price

253. 9.0 Sale price of the

mineral (grade-wise

for Karnataka) as

published by Indian

Bureau of Mines for

such month of

despatch.

IBM provides grade wise

average sales of iron ore for

major iron ore producing states

in India. Since now monthly

payments by successful bidder

would be linked with selling

price, it is suggested that IBM

may be requested to tabulate

prices for every 1 % increase in

Fe %, starting from lowest Fe %

present in the mines being put

up for auction.

At present, our observation is

that IBM rates are not indicating

the true market rates and in

many cases the rates for Fe



Document.



prevail.



No.


amendment, if any

Response

content 58-60%, 60-62%, 62-

65% are all same. Request you

to find out a suitable mechanism

by which the DMG, Government

of Karnataka will send the

monthly average prices for Fines

& Lumps for different grades to

the IBM which shall be taken as

the basis for the payment of

premium.

254. Mineral (Auction)

Rules, 2015

Payment of royalties

to the State

Government

As per Rule 13 of the Mineral

(Auction) Rules, 2015 the lessee

shall pay royalties to the State

Government. For the purpose of

calculation of royalty by the

lessee, whether the IBM Price or

the Bid Price has to be

considered for arriving at the

amount of royalty to the paid to

the State Government.

Royalty shall be payable as per

the provisions of the MMDR Act

and rules thereunder.

255. General

IBM Prices

IBM prices for Calibrated iron ore

is same from 55% Fe to 65% fe

grade and for iron ore fines the

prices for 55% fe and 65% Fe are

as per fe %.

We suggest that prices

for iron ore should be in

line with fines – i.e. fe

grade wise price for

each grade.



Document.



No.


amendment, if any

Response

256. General

IBM Prices available

on IBM wed site are

not correct

IBM Prices published in

Karnataka are higher by 30-40%

than Karnataka iron ore prices.

We understand IBM

prices are arrived based

on actual transaction

prices in the state. DMG

has all the prices FE

band wise as 100%

material in the state is

sold by e auction. It can

be tabulated and

compared. We like to

have transparent /

correct IBM prices.



Document.


Document and MDPA are based

on the Mineral (Auction) Rules

2015.

Reserve Price

257. General Reserve price of 35% itself is too

high a number considering

current tax regime of 15% royalty,

15% of DMF and other taxes

takes the total taxes itself ~70%,

DMG has to look for a reasonable

base price %.

The Hon’ble Supreme Court in its

order dated 30th July 2015 fixed

the reserve price at 35% of the


Therefore, it cannot be modified.


Clause 9

The floor/ reverse bid percentage

(%) scheduled at 35% is too high

and not viable. Request to kindly

review and reduce the same.








No.


amendment, if any

Response


clause 7.

Is 35% of mineral dispatches to

be paid to government on

monthly basis or this is only for

calculation of securities?

The Reserve Price is 35 % (thirty

five per cent) of Value of Mineral

Despatched. For payments,

please refer Clause 7 of MDPA.


Clause 9

Reserve price fixed at 35% is

very high and may not be viable

which will necessitate revised

fixation of reserve price by State

and rebidding. All 11 mines are in

Forest. Therefore, taxation by

Govt is 36+royalty 15+fdt

12+DMF/NMET 1.8 =vat etc

3=68 assuming IBM price of iron

ore ex-mines is 100. At current

market price both domestic and

international, iron ore mining will

not be viable.







Clause 9 Floor Price

The floor / reserve bid

percentage (%) scheduled at 35

% is too high and not viable.

Request to kindly review and

reduce the same.






Geological Report



No.


amendment, if any

Response

262. Clause No 5 –

Geological Report

Method of ore

resource estimation

(5.1.4)

(5.2.2)

Shape of Ore Body

1. How is it possible to interpret size and shape of ore body with one bore hole in a section?

2. Why there is no connection between ore body on the geological plan and ore intersection in section?

3. How exact resources and reserves can be estimated with one or two bore hole in a section?

4. How bulk density can be same for all category of ore as taken in estimation of ore resources and reserves?

Exploration carried out meets the

requirements of The Minerals

(Evidence of Mineral Contents)

Rules, 2015.


Annexure-II

1) Boreholes coordinates given

in Annexure-II of bid document

are not matching with the ground

position. There is a shift of 25 to

40 metre from actual position on

ground. UTM Coordinates given

in annexure- II were checked for

24 boreholes in the field and

found not matching.

2) We found some boreholes are

not drilled on ore band. Since

MECL drilled bore holes at every

100 meter, these boreholes are

drilled on the side of ore body.

MECL (Exploration agency)

verified and found that there is no

such mismatch, as pointed out.

However, Differences may be due

to shift in reference point.

Additionally, attention is drawn to

Clause 1.3 of the Tender

Document.



No.


amendment, if any

Response

3) In some bore holes lithology

description is not matching with

grade for example borehole

number MLM-2 and MLM-49

The lease position as per the

coordinates given by Annexure-II

of Tender Document gets shifted

to almost 30 to 50 mtrs towards

south. Please clarify the exact

position

264. At page no III of

MECL report

True thickness of ore bands is

given. The maximum thickness is

21.65 metres. Hence lateral

extension of 50 metres on either

side of iron ore intersection of the

bore holes is not correct because

by doing this they have

considered ore body thickness of

100 metres which is not matching

with their own statement.

ore body projected based on

single borehole. Lateral extension

of 50 metres on either side of iron

ore intersection of the borehole

were considered as 111 UNFC

category, in some sections

beyond 50 meter is considered

Please clarify




Rules, 2015



Document.



No.


amendment, if any

Response

as 112 category and below the

iron ore body column in the

borehole upto the depth of 15

meter is considered as 121

category. However as per new

IBM guidelines only 25% of

lateral extension from extreme

borehole can be considered for

reserve estimation of 111

categories. Also ore body

projected below the ore body

column/ borehole should be

considered under 333 categories

(possible resource).

As per UNFC Classification there

is no 112 category, if it is

probable reserve then correct

UNFC category is 121 or 122.

265. Plate no. VA to VD

of bid document

MECL Geological Cross sections

given in Bid documents are with

lease boundary. hence MECL

had estimated reserves/

resources without considering

any stripping angle and without

leaving 7.5 meter safety barrier.

Also towards north of the lease,

in some sections ore body

The total mineable

reserves are estimated

as 5 to 6 Million metric

Tonnes, whereas the

tender document

indicates, 14.709 Million

Metric Tonnes. Please

clarify the exact position

(Quantity).

Resource estimation has been

done within the boundaries as


Supreme Court vide judgment

and order dated 18 April 2013.




Rules, 2015



No.


amendment, if any

Response

beyond lease boundary is also

considered for reserve / resource

estimation.

Because of the above reasons

(from point no. 3 to 10 of Tender

Document) there is escalation of

reserve / resource quantity.

To crosscheck the ore tonnage

given in MECL report, MECL

geological cross sections and

reproduce (given in pdf format

along with bid document) and

using same factor as MECL

(without considering Lease

boundary), reserve/ resources

are re-estimated. Sectional area

checked from reproduced

sections and found negligible

difference.

However to know exact mineable

reserves, MECL reserve/

resource by drawing lease

boundary, considering 7.5 meter

safety barrier and at 30 & 45

degree stripping angle

separately. The details are given

below.



No.


amendment, if any

Response

266. MECL Report Detail analysis of all the

elements are not mentioned In

the report, such as S, P, Mn02,

Alkali, LOI, etc. to understand

the ore characteristics.

These elements are

critical for making

special steel for end

user

Please refer geological report and

interpret the full chemistry of the

iron ore.

In this regard, please refer clause


267. Geological

Report/Information

Memorandum

Full chemistry (Manganese,

Phosphorus, Tumbler index,

alkalis and micro fines) of the ore

for all the mines be provided for

better evaluation of the mine.


interpret the full chemistry of the

iron ore.

In this regard, please refer clause


268. MECL Report Since MECL has used

GEMCOM & Datamine software

for estimation of geological

resources. Is it possible to

provide soft data of the same

after purchase of Tender

documents of particular mine

MECL has not used GEMCOM

and Datamine software.

269. On Page 26 of

MECL report table

no. 4, page number

27 & 28

It is mentioned that the specific

gravity ( Bulk Density) considered

is 3.5 whereas in same report

Table no. 4 page number 27 & 28

tonnage is arrived by considering

3.85 as specific gravity. In R & R

plan it is suggested 3.0. In some

Specific gravity considered for ore

resource estimation is 3.50.

The same is mentioned in

Chapter 3 of the Geological

Report.



No.


amendment, if any

Response

section, average sectional

influence is considered more

interval. On Section S-28

average sectional influence

considered is 166 meters.

Please clarify the actual gravity

270. Page no 20 of MECL

Report

In some section siliceous ore

analyzing 27% to 40% Fe and in

some section below the ore body

column is shown as ore and

sectional area is included for

reserve estimation. Hence

average grade given on page no.

20 of MECL report (considered

+45% Fe as cut off) should be

further diluted on those sections

because siliceous ore and waste

area was included for reserve

estimations.

Please clarify Exploration carried out meets the



Rules, 2015



Document.

271. Survey points Lakhsminaryan Mines GR

documents contains a detailed

list of x,y,z coordinates of all

surveyed points. Would be the

same data be provided for all

other blocks.

Additional document

required

It is not envisaged to provide x y z

values of all surveyed points.



No.


amendment, if any

Response

272. Geological Report Plans and sections provided with

Geological report are not to

scale. The A4 size plans and

sections are not legible for

Ramarao Paul, V.S Lad and

Sons, Nidhi Minerals,

Lakshminarayana Mining

Company Ltd. Please provide ‘to

the scale’ Geological plan and

sections.

The plans and sections provided

with GR are to the scale. The text

plate (A4 size) used as a key map

showing boundaries, as approved

by the Hon’ble Supreme Court

vide judgment and order dated 18

April 2013, are not to scale but

clearly visible.

273. GR - PDF The files (Topographic/

Geological Map/ Contours) are

not very clear. It appears that the

files are created in CAD software.

Can dwg/ dxf file can be provided

to the bidder for more clear

approach to the information.

Additional document

required

In addition to pdf files uploaded

already with mine specific

document, CAD files in .dwg

format for plates pertaining to

geological report will also now be

provided with mine specific

Tender Document.

274. Geological

Report/Information

Memorandum

Sketches of mines are in PDF

version and not legible. Same be

provided in auto-cad format.

In addition to pdf files uploaded

already with mine specific

document, CAD files in .dwg

format for plates pertaining to

geological report will also now be



No.


amendment, if any

Response

provided with mine specific

Tender Document.

275. Geological

Report/Information

Memorandum

Details of minable reserves be

provided, as the reports provide

details of only geological

reserves.

Geological reports meet the



Rules, 2015.

276. Geological Report

(Text) 5.4.0

Estimation of

reserve & grade

Grade wise resource estimation

should be provided,

since all +45% Fe ore is

not mineable.


interpret the grade wise resource

present in the mine. Please refer


Document.

277. Geological report

General

MECL has defined the ore body

as horizontal body, but actually

ore body is dipping sub vertical

to vertical in all the mines. Can

you clarify on what basis ore

body has been modelled

horizontally? The width of 100 m

has been considered on either

side of the borehole. But in

actual it is not there. Pls give

clarification.

It is suggested to

provide the data to

another agencies like

MECON/ GSI for

validation or for

preparation of ore body

model ling and

Geological / Mineable

reserve through

Software.




Rules, 2015



No.


amendment, if any

Response


Geological Reserves

estimated by MECL

MECL has considered the width

of 100 m on either side of the

borehole. But actual ore body is

not exactly 100 m on both side

and hence the method used by

MECL for reserves estimation is

not correct?

Please reconsider the

assessment method of

estimating reserves in

the MECL report and

work out correct

reserves.




Rules, 2015

e-auction

process/Schedule III

of Tender Document

279. Clause 8.1 A (a) (ii)

initial price offer,

which shall be a

percentage of Value

of Mineral

Despatched and

must be equal to or

greater than the

Reserve Price as

specified in Clause

9. (Tender

Document for Rama

Rao Paol (Mining

Lease - 2621))

Can initial price offer be in

decimals? If yes, up to how many

decimal numbers?

Yes, up to 2 decimal places.

Please note that this is only for

the Initial Price Offer.


Addendum.



No.


amendment, if any

Response

280. Schedule III

3 b. b.

“The Qualified

Bidder shall have to

put its Final Price

Offer over and

above the displayed

highest bid by a

minimum increment

of 0.1% to become

the highest Qualified

–Bidder”.

We understand that the Bids

need to be increased with

multiple of minimum increment of

0.1%. Please confirm the

understanding.

Clarification required to

understand whether bid

can be increased only in

multiple of 0.1% or any

number higher or lower

than 0.1%. If so up to

what decimal place.

Increment has to be in multiples

of 0.1%. Please note that this is

for the Forward Auction Stage.


Addendum.

281. Schedule III 3 b. b.

The Qualified Bidder

shall have to put its

Final Price Offer

over and above the

displayed highest

bid by a minimum

increment of 0.1% to

become the highest

Qualified -Bidder.

(Tender Document

for Rama Rao Paol

(Mining Lease -

2621))

Whether increment has to be in

multiples of 0.1% or any value

equal to or more than 0.1% will

be accepted?

Increment has to be in multiples

of 0.1%. Please note that this is

for the Forward Auction Stage.


Addendum.



No.


amendment, if any

Response

282. Schedule III

Tender Process

Conduct of e-auction

When a company bids for more

than one mine and is successful

in all and if all those mines come

up e-auction on the same day,

whether MSTC platform shall

allow simultaneous log in by the

same company for more than

one mine auction?

Whether bids can be

submitted for more than

one mine with same

login id & DSC with

single system

Please clarify when

such situation arises

when more than one

mine are being

parallel e-auctioned

and a company is

participating in more

than one at a time.

Yes, bidding can be done

simultaneously for more than one

mine by logging in using the same

DSC in the same system for

different sessions running

simultaneously.

283. Conduct of e-auction

“during the process

of e-auction, the

bidder shall be

required to sign their

bid with their

respective DSC”

Is it necessary for the bidder to

affix DSC to login to the portal

and participate in the e-auction

for tendering final price offer or

DSC can be inserted in the

system (desktop) just before

submitting the final bid.

Is it necessary to insert DSC to

the system since login to, till

submission of bid or can it be

removed after initial sign up?

Process of Utilisation of

DSC needs to be

elaborated

Yes, it is required to affix DSC

before login and it should remain

in the system until the bidder uses

the MSTC portal for submission of

the bid. “No Task can be

completed without using DSC in

the MSTC portal”.

284. Clause 11 (Tender

Document): Time

table (13)

When the auction takes place for

more than one mine at a time,

how to participate in multiple bids

Clarification required clarification required Bidding can be done

simultaneously for more than one

mine by logging in using the same

DSC in the same system for

different sessions running

simultaneously.



No.


amendment, if any

Response

285. Clause 11

Timetable of Tender

Document

There are total 14 mines being

put on auction while timetable

provide for only 5 days for

auction as also provide for

announcement of preferred

bidder on the same day. Kindly

clarify following on the auction

process and schedule:

A. How 14 mines be auctioned in 5 days.

B. There are high chances that several mines will attract same Bidders. In case a Bidder is shortlisted for auction of more than one mine on the same day, how same would be done on the auction platform.

C. Will bidder be given separate id for such auction however Bidder can only log into one system from one DSC or both auctions can be done on the same window?

D. Also, schedule of e-auction should be provided upfront now for better planning.

E. What happens if the auction is not concluded within stipulated time or the same day. Will same be continued

Entire bid process must

be relooked at and

schedule be provided to

ensure that bidder can

have opportunity to

participate in each mine

of its interest.

A, B, D. The Auction Schedule

will be intimated to the Qualified

Bidders in advance of auction

date.

C. Login ID & DSC will be same

for simultaneous bidding for

different mines from the same

system

E. The e-auction proceeds

continuously till it ends.

F. Bidder has to bid carefully as

per their requirement. No change

in the provisions of the Tender

Document.



No.


amendment, if any

Response

till it end or scheduled for a later day?

F. It should also be noted that in case bidder is bidding for more than one mine simultaneously, there are possibility that bidder may become highest bidder in case of more than one mine while it may need only one mine. In such case, what is the recourse to bidder without incurring any penalty both financially and otherwise (i.e. it should not be barred from any future auctions).

286. Schedule III

Clause 3 (i) & Bid

Floor Manager

online submission of

technical bid and

initial price offer with

supporting

document /bid floor

manager:

The final submission

shall be digitally

As the process of auction of

multiple blocks shall run

simultaneously, there are

chances that some Bidder

become Highest Bidder in more

assets then its requirement.

Please suggest if MSTC has any

wherewithal to check such

instances. How MSTC would

ensure that bidder can

participate in the auction of more

than one assets if e-auctions are

done parallel for more than one

In case of multiple bids

at same time, it may

happen that a Bidder

becomes preferred

Bidder in more assets

than it requires, but it

should not be penalised

in that case.

Bidder has to bid carefully as per

their requirement. No change in

the provisions of the Tender

Document.



No.


amendment, if any

Response

signed by the bidder

using its registered

digital signature.

asset where same Bidder is

qualified.

287. Clause 8 A ( e )

Provided that where

the total number of

technically qualified

bidders is less than

three, then no


bidder shall be

considered to be

qualified bidder and

the e- auction

process shall be

annulled. Provided

further that the State

Government may, in

its discretion, decide

not to annul the e-

auction process if

even in the third or

subsequent attempt

the total number of


bidders continues to

be less than three

and the State

Government may, in

In case of less than 3 technically

qualified bidders for a particular

mine, whether the e-auction

process will start afresh for that

particular mine? Please clarify.



Clause 8.1 A (e) of the Tender

Document is self-explanatory in

this regard. Also refer to relevant

clauses of the Mineral (Auction)

Rules, 2015.



No.


amendment, if any

Response

such case, decide to

consider the


bidders as qualified

bidders so as to

continue with the

bidding process.

(Tender Document)

288. Clause 8 A ( e )

Tender Document

Provided that where

the total number of



three, then no


bidder shall be

considered to be


the e- auction

process shall be

annulled.

Provided further that

the State

Government may, in

its discretion, decide

not to annul the e-

We understand that in case the

total number of technically

qualified bidders is less than

three, then the e-auction process

shall be annulled in the first two

attempts.

Therefore, such assets shall be

retendered. Please confirm if the

Government of Karnataka is

obliged to conduct tendering

process for such assets thrice

before it may finally decides to

consider less than three

technically qualified bidders as

qualified Bidder

Government should not

restrict a Bidder from

owning the asset only

for a reason that other

Bidders are not

interested in the same.

It will otherwise reduce

revenues to

Government.

Further for improving

participation, it is better

to understand the

concerns of Bidder for

such asset.

Provided where the

total number of



three, then no


bidder shall be

considered to be


the e- auction

process shall be

annulled.

State Government

shall retender these

mines which receive

less than three


bidders with an

objective of

Yes, the State Government would

need to conduct the bidding

process for such mines at least

thrice before it may decide to

consider less than three

technically qualified bidders as

qualified bidders.



No.


amendment, if any

Response

auction process if

even in the third or

subsequent attempt

the total number of



be less than three

and the State

Government may, in


consider the



bidders so as to

continue with the

bidding process.

improving

participation.

In case, even after

retendering, the

number of


bidders remain less

than three, the State

Government shall

annul the e-auction

process if even in

the third attempt the

total number of



be less than three

and the State

Government may, in


consider the



bidders so as to

continue with the

bidding process.



No.


amendment, if any

Response

289. Clause 11(13)

Conduct of

ascending forward

electronic auction

and submission of

Final Price Offer on

the electronic

auction platform

1. How many mines will be put for

electronic auction in single day?

2. Will there be any overlapping

in electronic auction of two or

more mines?

3. Electronic auction of only one

mine should be conducted at a

time. Otherwise, it will not be

feasible for a bidder to put Final

Price Offer simultaneously for

multiple mines where same

Digital Signature has to be used.

1. Auction schedule will be intimated in advance of auction to the Qualified Bidders.

2. Overlapping of auctions of more than one mine may happen.

3. In case of overlapping of e-

auctions, bidding can be done

simultaneously by logging in

using the same DSC in the same

system for more than one mine

i.e. different sessions running

simultaneously.

Net Worth


Clause 5 (b) I 2

The net worth calculation has

been totally changed and not as

per standard Income Tax norms

or Companies Act. I, personally

fail to understand why the net

worth calculation should be done

in a different format, when there

is a prescribed format with the

Income Tax Department, who is

Auction of Category “C” iron ore

mines is based on the MMDR Act,

Mineral (Auction) Rules 2015 and

Hon’ble Supreme Court Judgment

in Samaj Parivartana Samudaya


and Ors in W.P. (C) 562 of 2009.

Accordingly, the Tender

Document issued by the



No.


amendment, if any

Response

the authority and also in the

Companies Act. After using the

formula prescribed by the

Income Tax Department, it can

be certified by a Chartered

Accountant. This is the usual

process and a standard norm

followed for any individual or

Company net worth.

The net worth calculation is

totally of a different style and

also technically wrong. This will

be definitely challenged in the

Court of Law and inviting

complicate matters further. It can

also be challenged in the Court

of Law that the new net worth

calculation, should be due to

vested interests.

Hence, I would request the

Department Mines & Geology to

make an amendment in the

Tender Document, for calculating

the net worth for an Individual or

a Company, as per the IT norms,

Government of Karnataka takes

into account the Mineral (Auction)

Rules 2015, the Model Tender

Document issued by the Ministry

of Mines, Government of India

and the aforementioned Hon’ble

Supreme Court Judgment.

The Mineral (Auction) Rules 2015

clearly provide the methodology

for calculation of Net Worth,

which has been used in the

Tender Document issued by the

Government of Karnataka, and it

cannot be modified.



No.


amendment, if any

Response

Companies Act and not

otherwise.

291. Tender Document Clause 5 (b) 1, Explanation 2

In case of a company can Promoters/Shareholders/ Directors net worth can be included?

No. A company is a separate

person from its Promoters /

Shareholders / Directors. In case

the subsidiary is bidding, then it

can draw upon the strength of the

holding co. Please refer

Explanation 1 of 5 (b) 1 of the

Tender Document.

It is further clarified that in case

the Bidder is a subsidiary of

another company incorporated in

India and is using the net worth

of such holding company for the

purpose of eligibility, then the

Bidder shall submit its

shareholding pattern including

name of the promoter(s)/ owner

(s) as on 31st March 2015 duly

certified by the statutory auditors.

In addition, in such case, the

Bidder shall submit a board

resolution by the holding

company in favour of the Bidder



No.


amendment, if any

Response

for permission to use net worth

for the purpose of eligibility.

Please refer the



If any Promoters/Shareholders/Directors of the company is an NRI, whether his net worth can be taken into company's net worth?



Shareholders / Directors. In case

the subsidiary is bidding, then it

can draw upon the strength of the

holding co. Please refer

Explanation 1 of 5 (b) 1 of the

Tender Document.















No.


amendment, if any

Response






Please refer the



In case of company, sister concern net worth can be considered or not?

Net worth of only a holding

company may be considered in

case the applicant is a subsidiary

company. Please refer

Explanation 1 to 5 (b) 1 of the

Tender Document.













No.


amendment, if any

Response








Please refer the



Clause 5

When you allow major Net worth

companies to bid for all mines

would result into cornership the

all mines auctions, secondly,

Supreme Court allowed the

sponge and Pellet plants to

participate but 50:50 ratio would

preclude them and very few small

companies with limited Net worth

till be overpowered by a big Net

worth company. This would

indirectly will become monopoly/

cartel and even dictate A&B

mines to reduce their rates.

Hence suggested that big Net

worth companies should not be

Calculation of Net worth

requirements is based on the











No.


amendment, if any

Response

allowed to bid for smaller Net

worth Mines


Clause 5

Can promoter’s Net worth be

added to the company’s net

worth?



Shareholders / Directors.

Except in the case of a holding

company being a promoter or

shareholder in the applicant.

Explanation 1 to clause 5 (b) 1 of

the Tender Document provides

that the net worth of only a

holding company may be

considered in case the applicant

is a subsidiary company.




India and is using the net worth of

such holding company for the











No.


amendment, if any

Response





Please refer the


Miscellaneous

296. -

Is there any following special concessions for participating in the E-auction mining under “C” Category since we are situated in Hyderabad-Karnataka region?

1. Concession in Tender document

2. Concession in Stamp duty

3. R&R Cost

4. IBM Average price to be reduced

5. Reduction in 1st Instalment upfront payment

6. Compensatory Afforestation

7. Any other levies

There are no special concessions

under the Tender Document

and the bidders need to comply

with all the Applicable Law.


Clause 10.3

Whether current mining cap of

25 million tonnes will increase

considering the saleable capacity

under proposed e-auction now

and in future.

The current production cap is at

30 million metric tonnes (25

million metric tonnes for total

production of iron ore from all the

mining leases in District Bellary

and 5 million metric tonnes for



No.


amendment, if any

Response


mining leases in Districts

Chitradurga and Tumkur together)

and it includes all the 14 Category

“C” mines now put up for auction.

However, the Hon’ble Supreme

Court may at its sole discretion

increase/decrease this limit in

future.

298. Geological Report If Successful bidder is unable to

get estimated mining reserves as

per MECL report and exhaust

this reserves before lease

period, how amounts will be

refunded

No such amounts will be

refunded. It is a business risk,

which needs to be assessed by

the bidder. Please refer Clause



Clause 10.3

Other expenditure like NPV,

afforestation, dead lease rent,

SPV, safety zone charges, cess,

etc. are payable by Successful

bidder after signing of ML

agreement & during operation of

mine

The Bidder has to bear all such

charges/ expenses/ payments/

duties/ taxes/ royalty/amounts as

per Applicable Law.

300. If there is no dump area

available in the mine, whether

you will provide us land for

Land required to be

made available with

reasonable cost

No. Dumping is allowed only

within the Lease Area..



No.


amendment, if any

Response

dumping area required to mine

as per RR plan & mining plan.

301. Tender Document After getting mine as successful

bidder, if there is any unknown

liability cropped up then who will

bear the said liability?

To be defined and

not to be charged to

successful bidder

As per provisions of the Tender

Document and MDPA or

Applicable Law.

302. Other Every liability of any prior allottee

in relation to auctioned iron mine

in respect of any period prior to

the MDPA, should be the liability

of such prior allottee and shall be

enforceable against it and not

against the successful bidder

Successful bidder

should be held

responsible or penalized

for deeds of Prior

Allottee.

Any penalty levied/ leviable on the

erstwhile lessee shall not be








Also as far as R&R Plan






to Bidders’ queries shall apply. .

303. Clause 13.6.1(e)

acknowledged and

agreed that

Can the Successful Bidder

surrender the mine if it is found

that:

No compensation can be made. It

is a business risk, which needs to

be assessed by the bidder.



No.


amendment, if any

Response

inadequacy, lack of

completeness or

incorrectness of

information provided

in the Tender

Document or

ignorance of any of

the matters related

to the e-auction

process hereinabove

shall not be a basis

for any claim for

compensation,

damages, extension

of time for

performance of its

obligations, loss of

profits etc. from the

State Government,

or a ground for

termination of the

MDPA by the

Successful Bidder;

and (Tender

Document for Rama

Rao Paol (Mining

Lease - 2621))

1. Actual mineral reserve is much

lower that mentioned in the

Tender Document.

2. There is significant deviation in

actual grade and the grade

mentioned in the Tender

Document.

In such scenarios, how will the

Successful Bidder be

compensated?


Tender Document.



No.


amendment, if any

Response

304. MDPA, Clause 4.1.3

For the purposes of

such reassessment,

the Successful

Bidder shall submit

an application in

writing to the State

Government at least

three months prior to

the expiry of the

aforementioned

period of five years.

Such application

must contain in

sufficient details,

documentary

evidence confirming

the reassessed

Value of Resources

on the date of such

application. (Mine

Development and

Production

Agreement)

What sort of documentary

evidence is required from the

successful bidder from confirming

the reassessed value of

resources? Please clarify.

Clause 4.1.3 of the MDPA is self-

explanatory in this regard.

305. Clause 4.3.1

Table 4.3.1

2. Failure of the

How will following situations be

dealt with:

1. Successful Bidder is unable to





No.


amendment, if any

Response

Successful Bidder to

comply with the

Production

Requirement as

required under

Clause 8.(Mine

Development and

Production

Agreement)

comply with Production

Requirement due to unavailability

of mineral reserve to mine.

2. Quality of mineral in the mine

is lower than the quality

mentioned in the Tender

Document and same is not

usable by the Successful Bidder.

So, the Successful Bidder has

not produced as per Production

Requirement.


Tender Document.

306. MDPA Clause 13.

Transfer of Business

Transfer of Business: If the

successful bidder transfers his

business fully or by way of joint

venture (JV) to a new company,

how the mining lease will get

transferred in the name of new

company?

In the event of transfer of

business or entering into a joint

venture, the mining lease would

need to be transferred in

accordance with the Applicable

Law. The MDPA provides for

assignment. Please refer Clause

13 of the MDPA.

307. - What are the transaction

expenses of CRISIL, MSTC &

others borne by the successful

bidder?

Clarification required Please refer to Clause 10.2 (f) of

the Tender Document for

understanding the various

expenses to be borne by the

Preferred Bidder. The sum total of

these expenses have been

disclosed under the same clause



No.


amendment, if any

Response

in the mine specific Tender

Document.

308. MDPA Clause 12

Indemnities

The successful bidder should be

indemnified from all the unknown

liabilities and encumbrances for

the earlier period.

Any penalty levied/ leviable on the

erstwhile lessee shall not be








Also as far as R&R Plan






to Bidders’ queries shall apply.

309. With the existing cap of 25 million

tones nearly allocated among the

A & B Category mines, how is the

quantity of C category mines be

given. Raising the cap of 25

million tones is utmost necessary,

without which getting mineable












No.


amendment, if any

Response

quantity for auctioned mines is

difficult.






future.

310. Part A

Point 4

Quantity of Minerals

(Grade-wise)

(Information

Memorandum)

Please clarify what would be the

recourse available to the

Successful Bidder in the event

the Total Geological Resources

of the Iron Ore are lesser than

the quantity indicated in the

Information Memorandum


required




Tender Document.

311. Clause 13.1.2 and

13.3 of MDPA:

Assignment

It will be useful to clarify whether

the Successful Bidder will be

permitted to assign the MDPA to

the lenders at the time of availing

financing from them, as 13.1.2(b)

mentions that the assignment is

permitted upon occurrence of an

enforcement event.

Clarification required Clarification

required

Please refer clause 13.3.1 of the

MDPA which subject to

Applicable Law, allows the

Successful Bidder to create

security over the Lease Area

through mortgage for the

purposes of availing financing

from a bank or financial

institutions for the purposes of

financing of mining operations at

the Lease Area.



No.


amendment, if any

Response

312. Clause 19.2 of

MDPA: The

Successful Bidder

shall not issue any

information,

document or article

for publication in any

news or

communications

media or make any

public statement in

relation to this

Agreement without

the prior written

consent of the State

Government unless

required to do so by

Applicable Law,

provided that prior to

any disclosure of

any such information

required by

Applicable Law, the

Successful Bidder

must first notify the

State Government,

who shall then have

the opportunity to

Listed Companies need to inform

Stock Exchange immediately on

allotment of mines

Compliance to the SEBI

Act

As per regulation

30 of SEBI Listing

and obligation, 2015

(Listing Regulation),

the listed Company

is required make

disclosure of

material events /

information promptly

to the Stock

Exchange where the

shares of the

Company are listed.

The Company

should be allowed to

inform Stock

Exchange on being

declared as a

successful bidder

under clause 10.2 of

the tender

documents.

As per clause 19.2 of MDPA,

which allows for disclosure of any

information related to MDPA as

required by Applicable Law,

subject to notification to the State

Government.



No.


amendment, if any

Response

respond to and/or

dispute such

intended disclosure

313. Clause 3.7 of the

Tender Documents

Clause 18.4 (MDPA)

Full or partial

prohibition of mining

activity (Tender

Document &

MDPA): Prohibition

of Mining Activity

We note that the Tender

Documents in relation to

Karthikeya Manganese (Mining

Lease 2559) and Hothur Traders

(Mining Lease – 2313) mention

that in terms of Supreme Court of

India's judgment dated February

18, 2011 in the case of K.

Guruprasad Rao vs. State of

Karnataka and Ors. 2012 (12)

SCC 727 the State Government

of Karnataka may prohibit mining

activities based on the report of

the committee for assessment of

the impact of damages caused by

the mining activities close to the

Sri Kumarasaway Temple and Sri

Parvaty Temple. To this end,

please clarify whether the

Successful Bidders would be

compensated for expenses

incurred in mining/production

activities in the event the

prohibition order of the


required



prevail



No.


amendment, if any

Response

Government of Karnataka is

issued subsequent to the

commencement of the mine

production activities.

314. SC Judgment the production cap of A & B

group of mines is 30 MT,

whether the production cap for

these 14 mines which are

coming for auction will be

included in the cap of 30 MT or

will it be additional quantity















future.


Clause 10.3

There is no taking over

formalities known of the lease

example: if any old material like

ROM, Lumps, Fines and sub-

grade is there whose

accountability is that?

The formality for takeover is not

the subject of Tender Document

and shall be dealt with as per the

extant rules/ procedures of the

State Govt.



No.


amendment, if any

Response

316. General Whether the existing access to

public road and railway siding for

evacuation of ore will be

provided to the successful

bidder?

As per Applicable Law.

317. General In cases where entire resource is

not minable due to limitation of

lease area, whether govt. will

enhance the lease area to

facilitate scientific mining and

mineral conservation?

The lease boundary of each of

the mining lease has been


Supreme Court vide judgement

and order dated 18 April 2013,

and the same cannot be

enhanced.

318. Clause 10.2 (c)

Tender Document

How the reassessed value of

resource shall be computer every

five years?

Our understanding is that

mineable/ extractable resources

as reflected in the approved R &

R plan shall be considered as

initial resources and actual

quantity of ore despatched out of

this shall be deducted to arrive at

reassessed resources. Please

confirm

Clause 4 of the MDPA is self-

explanatory in this regard.



No.


amendment, if any

Response

319. Clause 10.2 (f)

Tender Document

The total expenses should be

mentioned in the Information

Memorandum as decision to

proceed with any asset depends

on the quantum of expenses and

obligations. Hence overall liability

should be mentioned upfront.

Knowledge of these

expenses is important

for making any decision

to buy tender document.

Hence should be made

public before purchase

of document. These are

Government of

Karnataka expenses

and liable to be public

information.

Please refer mine specific Tender

Documents.

320. New Insertion

(suggested by

bidder)

The bidder shall be allowed to

present and witness the

Technical Proposal at the time of

opening of technical bids and

also at the time of

announcement of technically

qualified bidders

The bidders can participate at the

time of opening of technical bids.


Rama Rao Paol (ML

2621)

13.6 Verification of

information by

Bidders

Does the ML area include space

for dumping, plant , workshop

and other related infrastructural

facilities

since as per latest

regulation Govt. has to

delineate areas mining

and ancillary facilities

within a mineral block

before putting on

auction.




only.

Dumping is allowed only within

the Lease Area..



No.


amendment, if any

Response


Rama Rao Paol (ML

2621)

10.2 (f) pay the

actual expenses

incurred by the

Government of

Karnataka on mine

exploration,

preparation of

Provisional R&R

Plans, survey,

construction of

pillars DGPS survey

within 60 days of

issue of letter of

intent. This amount

is equal to INR

3,78,61,249

Why is the Govt asking for this This is a pre-requisite

on part of government

to bear expense for

putting any block on

auction. The purpose of

exploration trust is

getting defeated.

Such provision has been made in

the Tender Document after

following the provisions of Mineral

(Auction) Rules 2015

323. 13.11.3 The State

Government

reserves the right

not to proceed with

the tender process

at any time, without

notice or liability,

and to reject any bid

A proper reasoning should be

given by government for

annulling any tender.

Since companies has to

allocate manpower and

huge money for working

towards auction.

As per the provisions of the

Tender Document.



No.


amendment, if any

Response

Tender document for

Rama Rao Paol (ML

2621)

without assigning

Tender document for

Rama Rao Paol (ML

2621)

any reasons


V S Lad & Sons (ML

2290)

13.6 Verification of

information by

Bidders

Does the ML area include space

for dumping, plant , workshop

and other related infrastructural

facilities

Since as per latest

regulation Govt. has to

delineate areas mining

and ancillary facilities

within a mineral block

before putting on

auction.




only.

325. 9(ii) mentioned in

Tender Document.

Nowhere in the Tender

document, it is mentioned that

the grade of the mined out ore

will be declared by whom. If it is

the lessee, then how the grade

will be ascertained and assured

by the State Government.

This shall be as per the

Applicable Law and extant rules

and procedures of the State Govt.



No.


amendment, if any

Response

326. Tender

Document/MDPA

What will be the compensation, if

the Reserves identified do not

materialize as predicted

No compensation shall be made.




Tender Document.

327. Information

Memorandum

What happens if there is serious

variation of estimated resources

compared to actual minerals

mineable. For example if

Information Memorandum

mentions 5 Million tons of iron ore

available but in reality if it is only

2 Million Tons OR 8 Million tons?




Tender Document.

328. With the existing cap of 25 million

tones nearly allocated among the

A & B Category mines, how is the

quantity of C category mines be

given. Raising the cap of 25

million tones is utmost necessary,

without which getting mineable

quantity for auctioned mines is

difficult.
















No.


amendment, if any

Response


future.

329. Tender document Mining Cap

As per current mining cap –

Bellary region – 25 mln and

Chitradurga – 5 mln = total 30

mln.

After this proposed auction of C

category mines- Bellary region

mine production will increase

beyond mining cap.

How this will be

considered -

Whether you will

increase mining cap.?

How C category mines

shall be given all govt

approvals considering

the limit of mining cap?















future.

330. Part D - Other

details (Information

Memorandum / Mine

Block Summery)

Copy of existing IBM Plans & all

sketches in Auto cad Soft copy

Existing IBM approved

mining plant to be given

to understand dump

areas. The sketches in

PDF cannot be read

and understood. All

drawings to be in soft

copy Auto cad format.

To be provided only to

IBM plan copy & all

drawings in Auto

cad soft copy to be

provided along-with

the mine specific

Tender Document

IBM plans are not part of the

Information Memorandum and


These are not being provided.



No.


amendment, if any

Response

Bidders who have

purchased tender

document.

331. Dumping area mine wise and old

IBM plans to be given.

IBM plans are not part of the

Information Memorandum and


These are not being provided.