Shree Cement has won the first ever non-coal mining lease auctioned by the state government of Chhattisgarh, India.
The Indian Bureau of Mines (IBM) price of limestone in Chhattisgarh was INR483.17/t. Shree Cement offered to pay INR284/t — the highest bid that was 58.95 per cent of IBM price. The auction process continued for over five hours on Thursday. In all, 192 bids were submitted.
“The auction of Karhi Chandi block itself would yield INR4386 crore to the state exchequer at the said IBM price by way of bid-revenue, in addition to royalty of INR1232 crore,” Chhattisgarh’s Mining Secretary Subodh Kumar Singh said.
The state government had notified auction of four limestone blocks and one gold block on December 8, 2015, under the MMDR (Amendment) Act 2015 that stipulated ‘auction’ as the mode for allocation of mineral resources and empowered the states to conduct the auction.
According to Shree Cement officials, the block has an estimated reserve of 166Mt with 80Mt cement grade limestone. The block would serve the company’s cement plant located in the same district.
The company had a major expansion plan to augment the capacity in Balodabazar plant to 5.2Mt. A memorandum of understanding had been signed earlier between the Chhattisgarh government and the Shree Cement, which has a cement production capacity of 23.6Mta from multiple locations.