Overview

• Govt. of Odisha launched the tenth and eleventh tranche of auction of mining leases of major mineral blocks in Dec 2019/ Jan 2020 which consisted of some major Iron Ore, Cromite and Manganese mineral blocks. 
• Govt. of Madhya Pradesh launched its third tranche of auction of mining leases of major mineral blocks in July 2019. 
• SBICAPS acted as the sole Transaction Advisor to the Govt. of Odisha and assisted them in the end-to-end auction process which included review of technical documents like geological reports, preparation of tender documents, managing the pre-bid meeting, responding to queries from prospective bidders, handholding during evaluation of bids and scheduling of the live e-auction.

Deal Highlights

• Govt. of Odisha has successfully auctioned about 1.9 billion tonnes of resources worth ~3.7 Lakh Crore. Auction premium discovered in respect of iron ore blocks – 90.90% (lowest) and 154% (highest) of the average sale price of iron ore in Odisha and weighted average price discovery is close to 105%. Govt. of Odisha is likely to rake up additional revenues of about Rs. 8,000-10,000 crore per annum by way of auction premium
• Single largest mineral block ever to be auctioned in India so far – Nuagaon iron ore block with mineral resources of 789 million tonnes worth Rs. 1.86 lakh crore.
• Govt. of Madhya Pradesh successfully auctioned one of the largest Diamond Mine (Bunder Diamond Block) via this auction process. Total value of the Diamond Block was around Rs. 55,000 Crores. Essel Mining was the successful bidder and won the block after offering an auction premium of 30.05%