Mineral Resources Department, Government of Chhattisgarh REPLY TO PRE BID QUERIES FOR "AUCTION OF MINING LEASE FOR GUMA LIMESTONE BLOCK

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1 Mineral Resources Department, Government of Chhattisgarh Directorate of Geology & Mining Indravati Bhavan, Block-4, Second Floor, Naya Raipur, Chhattisgarh , India Phone No , Fax: dgm.cg@nic.in FOR "AUCTION OF MINING LEASE FOR GUMA LIMESTONE BLOCK IN THE STATE OF CHHATTISGARH" NIT Ref. Invitation of bids for grant of mining lease for Guma limestone mineral block Dated 2 nd January No. MSTC/RPR/MINERAL RESOURCES DEPARTMENT, CHHATTISGARH/3/NAYA RAIPUR/17-18/21341

2 1 & Clause 4.1(i) Revenue Survey Particulars is included in memorandum Land owned by State Government & Land not owned by State government has been marked on the map and given in Tabular form also but proper Revenue survey details i.e. total area of each survey nos. along with detail that whether full khasra or part of khasra is falling in mineral block has not been provided in the information memorandum while in Clause 4.1(i) it has been mentioned that same is given in memorandum. As per Rule No. 9(2)(b) of the Mineral Auction Rules, 2015, it is mandatory of State Government to provide Revenue Survey details of Block put for auction. Proper and full Revenue Survey details in form of total area and area falling into block of each khasra No. falling in the block should be provided as required under Auction Rules and committed in Clause 4.1(i) of. Details of khasra no. village, block, district, type of land and area in Ha are already provided in Appendix 2 of Section 6 of. Area in Ha provided in the tabular form provides area inside the block boundary. 2 Clause 10.2-Declaration as a Successful Bidder & Clause 12(1) Time Table Stage II- Submission of Performance Security along with 2 nd installment of Upfront Payment Rule 12(2) of Auction Rules- Performance security may be invoked as per provision of MDPA & Mining Lease Deed. Clause 15.5 Successful bidder s Bid security will be returned, upon furnishing of Performance Security The Auction rules does not require payment of 2 nd installment of upfront payment & Performance security with six month of declaration as preferred Bidders. Performance Security & 2 nd installment of upfront payment need to be submitted by Preferred Bidder before declaration as Successful Bidder as per clause 10.2 of as well as per rule 10(3) of Auction rules. The present Time table require Performance Security & 2 nd installment of upfront payment on or before while till , preferred bidder does not become Successful Bidder. There is a time gap of 2.5 years, in this period there is no requirement of Performance Security & 2 nd installment of upfront payment. More ever as per rule 12(2) of Auction Rules, the Performance Security can only be invoked as per provision of MDPA & Mining Lease deed. There is no existence of MDPA & Lease deed within 6 month of grant of LOI. Performance Security & 2 nd installment of upfront payment should only be required before declaration as Successful Bidder. Necessary extension of Bid Security may be done till submission of Performance Security as per Clause 15.5 of. The same process of Bid security extension up to LOI period has been adopted by Gujarat Government in recent Limestone Block auction and the same practice should be adopted in this auction also. Not accepted. condition prevails. 3 Clause 10.4 The date of the commencement of the period for which a mining lease is granted shall be the date on which a mining lease is executed. Rule 10(9) of Auction Rules The date of Commencement of the period of Mining lease should be date of registration of mining lease deed not the date of execution of Mining Lease. Necessary corrections should be made in Clause 10.4 of. Clause 10.4 updated to read as - The date of the commencement of the period for which a mining lease is granted shall be the date on which duly executed mining

3 The date on which a duly executed mining lease deed is registered shall be date of commencement of the mining lease. lease deed is registered. 4 Schedule I C(2) Format of Bid Security Para 13(b) Due to typographical mistake, signed and delivered by Bank has been given in para 13(b) of Format of Bid Security, not at the end of Bid Security format. It should be corrected as signed and delivered by Bank always comes at end of Bid Security. In Schedule I C(2) Format of Bid Security Para 13(b),, signed and delivered by Bank inserted at end of Format of Bid Security i.e., after 13 (c). 5 Schedule III 3(ii)f- Photocopy of VAT Registration Certificate After the GST came into effect, the VAT certificate has no relevance. Proper corrections should be done in para 3(ii)f of Schedule III. The term Year (since commencement of mining lease) is not clear. Is it for the financial year in which mining lease have been registered or year calculated from registration of mining lease. VAT should be replaced by GST. In Schedule III 3(ii)f, VAT replaced by GST. 6 MDPA Schedule D- Minimum Production Requirement Year(since commencement of mining lease) Since the minimum production requirement is linked with mining plan and in the mining plan, term year means financial year starting from 01 st April to next year 31 st March. The production proposal in mining plan is given well before commencement of mining lease. If the term year in MDPA is for financial year and mining lease is commenced on 15 March of particular year, the initial 2 year 0% penalty period is effective for 1 year & 15 days only which is not justified. Year should be calculated from date of commencement of mining lease and should not be linked with financial year. It should be clearly specified in Schedule D of MDPA. condition prevails. The term year should be clarified in Schedule D and it should be calculated from date of commencement of mining lease and not as financial year for providing full two years of 0% penalty period. 7 Invoice against Fees Proper Invoice for Rs. 2,50, % GST should be provided having all the details such as GST etc. Invoice of payment towards fees should be provided to Bidders immediately after State Government would provide the invoice at the

4 to the bidders on time. It has been observed from past experience that Invoice has been provided to Bidders after several reminders and not on time. payment of tender fees or maximum within one month period of payment without any follow up. earliest. 8 Para 6 Summary of Mineral Block & Appendix -2 Land Schedule Records In the Summary of Mineral Block, it has been mentioned that there is only one village Guma in the Guma Limestone Block while in appendix -2 Land Schedule Records it has been clearly mentioned that there is total four nos. of villages in the Guma Limestone Block, namely Guma, Khapradih, Sarseni and Semradih. Name of Villages in which the mineral block lies is very vital information which is required to be submitted to various statutory bodies. The details of Villages in which the mineral block lies should be corrected and name of village Khapradih, Sarseni and Semradih along with Guma village should be given at all relevant places including maps. Name of the villages updated in the Summary of Mineral Block. 9 Appendix -2 Land Schedule Records Entry no Khasra No. 548, 549 & 550 has been shown in village Semradih while these Khasra No. lies in Village Khapradih. Proper Correction of Village Name should be made. updated. 10 Appendix -2 Land Schedule Records Entry No. 287 Area falling in Mineral block of Khasra No is 0.0 hectares. There is no logic of including a Khasra no. in list whose area does not fall in mineral block. Proper Correction should be done in Appendix -2 Land Schedule Records updated. 11 Appendix -2 Land Schedule Records Entry No to 290 Full area of Khasra No. 1501, 1502, 1503/3, 1503/4, 1504/10 of village Semradih has been part of granted mining lease no. 38/2007 of M/s Shree Cement Limited. When full area of these 5 Nos. of khasra has already been granted for mining lease earlier, How part of these Khasra can again be part of a different mining lease? Necessary correction in Land Schedule Records should be done and khasra nos. of Semradih Village which has already been granted for Mining Lease should be deleted. Khasra nos. updated in Corrigendum #1. There has been a marginal change in area. However the corresponding change in mineral resources is insignificant, hence the resource in Million Tonnes remains unchanged. 12 Study Chemical Analysis results of core samples Minor constituents as K 2O, Na 2O as well as alkalies as SO 3, Cl etc. in the chemical analysis is missing in chemical analysis results This is as per existing practice. 13 Plate II- Contour Grid and The Block Boundary is not properly marked on Both have been provided

5 Study Borehole Location of Guma Explored Block this plate. Contour are also not marked up to block boundary in the Plate. separately. Block boundary and borehole coordinates are already provided Study Para 10- Core has been preserved in Core Boxes Clause 7.6 The State Government shall endeavor to respond to the queries. Preserved samples of core should be provided to Preferred Bidder. It has been observed that a single line reply of prevails is generally given by State Government for most of queries. State Government should at least give some justification/clarification that why a particular query/correction suggested cannot be accepted rather than giving a single line reply of prevails. Clearly mentioning the ground/ justification that why a particular query/correction suggested cannot be accepted will help the Bidders to understand the terms of. There is no such provision of sharing cores or samples. The tender document derives its clauses from various acts and rules. Additional explanation is not warranted. 16 Clause 1.8- The issue of this does not imply that the State Government is bound to select a Bidder or to appoint the Preferred Bidder as Successful Bidder for the mineral block and the State Government reserves the right to reject all or any of the Bidders or bids without assigning any reason whatsoever The issue of this does not imply that the State Government is bound to select a Bidder or to appoint the Preferred Bidder as Successful Bidder for the mineral block and the State Government reserves the right to reject all or any of the Bidders or bids without assigning any reason whatsoever Provided that if the bidder is a Preferred Bidder/ Successful Bidder, he shall be given an opportunity of being heard in case of rejection of his bid. In case of rejection of Bid, the payments/ instalments made till that time as per the provisions of the by Preferred Bidder/ Successful Bidder may be appropriated. Also, the bidder might have invested substantial time in getting the necessary clearances and approvals. Thus, the clause is a substantial financial risk for the bidder. For these reasons, the Preferred Bidder/ Successful should be provided the opportunity to be heard prior to rejection of his bid. Such amendment is also in public interest as State Government may not have to go through the bidding process again. No change. condition prevails. 17 Clause 12 Timetable- This provision of the is contrary to the provision made in the Model Draft of the by the Central Government and also preamble of Schedule IV (MDPA) According to clause 10.2 of the the Preferred Bidder is considered a Successful bidder upon- Continuing to be in compliance with the As per the guiding Rules and clause 10 of notified Model document, a preferred bidder has to obtain various approvals to become successful bidder.

6 terms and conditions of eligibility Payment of second instalment of Upfront Payment Furnishing Performance Guarantee Submitting mining plan as per Section 5 of the Act (e) acknowledged and agreed that inadequacy, lack of completeness or incorrectness of information provided in the 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. Nowhere does this clause includes obtaining clearances as a pre-condition to being considered as a successful bidder. And, according to clause 10.3 of the the Successful Bidder and Sate Government shall enter into the MDPA on obtaining all consents and clearances etc But according to the timetable provided under Clause 12, the acknowledgement of the Successful bidder is dependent on the date of submission of necessary clearances. It is contemplated in the Auction Rules, 2015 and also in the Model draft of the Central Government that only a successful bidder shall apply for various approvals. Also, it has to be considered that unless a person has lawful rights (or acknowledgement from the State Government of being a successful bidder), he will not be able to successfully get permissions and approvals from various regulatory authorities Thus, to avoid confusion this clarification seems necessary What if the error is on part of the Government? It seems that any mistake/ error on the part of the Government will not make it liable and the burden of a loss caused by the same will have to be borne by the bidder. condition prevails. This clause is as per notified Model. No change.

7 19 20 MDPA from the State Government, or a ground for termination of the MDPA by the Successful Bidder; and The State Government shall not be liable for any omission, mistake or error in respect of any of the information provided or on account of any matter or thing arising out of or concerning or relating to the or the tender process, including any error or mistake therein or in any information or data given by the State Government Notwithstanding anything contained in this, the State Government reserves the right to reject any bid and/or to annul the tender process and reject all bids at any time without any liability or any obligation for such acceptance, rejection or annulment, and without assigning any reasons thereof. Schedule E to the MDPA- Warranties Clause 3 (e) - there are no actions, suits, proceedings or investigations pending or to the Successful Bidder s knowledge threatened against it at law or in equity before any court or before any other judicial, quasijudicial or other authority, the outcome of which may constitute an event of default hereunder; Clause 3 (f) -has neither violated or defaulted nor has Will the State Government give an opportunity to the successful bidder to be heard or not? The two mentioned clauses have wide implication on the business and hence it should be amended restricting the obligation mentioned thereunder upto the affairs of agreement only. The successful bidder is giving hereunder two types of representations and warranties under Schedule F of warranties. It includes authoritative warranty and general warranty. General warranty covers very wide scope and in specific the clause 3 (e) & (f) gives wide implication and No right of being heard is available at present in case of rejection. Obligation under this clause should be limited to the terms of agreement only. condition prevails. This clause is as per notified Model. No change. condition prevails. This clause is as per notified Model. No change.

8 knowledge of any violation or default with respect to any order, writ, injunction or any decree of any court or any legally binding order of any Governmental Authority; 21 : Guma Block Regionally Mahanadi is the main river. Chitawar and Khorsi nalas are the main drainage system. The block, however, does not have any stream Whether existence of the nalas in any way affect the mining operations, or whether any further clearance or NOC or approval will be required from any statutory body before mining operations. If yes, what will be the total area on which mining could not be conducted before such permissions or approvals. No river or stream passes through the block. However, necessary approvals from statutory bodies to be taken, if applicable. 22 Map: there is an irrigation canal all along the eastern and southern periphery of the proposed block. As per Rule 12 (d) of MCR :-the lessee shall not carry on or allow to be carried on, any mining operations at any point within a distance of fifty meters from canal except under and in accordance with the previous written Permission from State Government In our adjacent mining lease at Guma, lease was granted keeping 50 meter distance between canal and mining Lease Boundary inspite of existence of mineral in the area left. Area falling within 50 meter from canal should be excluded from Block while granting Mining Lease. There is no condition in any rule with respect to demarcation of mining lease boundary by leaving 50m from canal. 23 Infrastructure and Environment: Shree Cement s plant is located at a distance of 100 m (NNW) How much of safety distance is required to be maintained from this plant? Have the resources been considered after leaving the safety distance? Blasting will be carried out for which a blasting safety distance will be required. Blasting parameters should be observed by successful bidder as per prevailing rules and regulations. Resource estimation has been done considering minimum restricted areas as per statutes. 24 Drilling Technique Any particular reason why the bore holes were terminated at 30.5 m depth uniformly? One of the bore holes drilled at greater depth has revealed continuation of limestone. Exploration has been done as per conventional practice.

9 25 Sub sampling Techniques and Sample Preparation Is the entire material retrieved in the course of drilling subjected to sampling or is it only limestone which was analysed? Although mention is made of laterite in the core log but there is no impact on iron values in the analysis for sample prepared that particular length. Only limestone horizon has been analyzed. 26 Quality of assay data and Laboratory Tests There is wide variation in the chemical analysis results for same description of core in the bore hole logs. Mention is made of clay pocket but the clay has not been recovered at all. The bore hole logs have the same description all through the bore holes. This has been recorded as per the observations of site geologist. 27 Quality of assay data and Laboratory Tests How many sample analysis results were cross checked for repeatability of results? The values of Al2O3 are very high. What is the reason for these high values? This will enhance confidence on the analysis results. Check sample analysis result is provided in the Addendum #1 Average Al 2O 3 is within the permissible limit. 28 Resource Estimation Techniques The extent of overburden and inter-burden to be handled has not been estimated. The stripping ratio of the deposit could not be ascertained. Raw data has been provided in the which is sufficient for determination of necessary parameters. 29 Appendix D: Graphic Lithologs Mention is made of Cement, Blendable/ Beneficial, Blendable Grade and Low Grade limestone respectively. What is the basis for such differentiations? No such differentiation could be seen in the Cross Sections enclosed as Appendix E to G nor is it mentioned in the text. Based on the internal guidelines circulated by IBM to State DGMs. 30 Appendix H: Map No geology could be seen on the map. The area is completely covered by soil. Sub-surface data can be found in the borehole logs. 31 General Will the Government ensure that the Government land is encroachment free and hand over the land to the successful bidder after removal of encroachments, if any? Regarding the control of surface area, the Preferred Bidder can take up separately with the concerned / appropriate department of the State Government. 32 General How will the Government support in expediting The Preferred Bidder can

10 purchase of private land? take up this matter separately with the concerned / appropriate department of the State Government. 33 General Infrastructure Whether Government will help in building/ providing infrastructure to the successful bidder? The area is poor in terms of infrastructure viz: rail, road, power and water. The area has adequate existing infrastructure. Further new railway line has been proposed through Baloda Bazar. 34 report Map In report Complete /composite map showing all the surface feature, grid, contour, and Block Boundary is not given. Surface feature, grid, contour, and Block Boundary should be incorporated in single map. These are all provided separately and each map has geological coordinates. 35 MSTC/RPR/MI NERAL RESOURCES DEPARTMENT, CHHATTISGAR H/3/NAYA RAIPUR/17-18/21341 Annexure A B. (1) (d) (iii) s to evidence the requirements of minerals for the specified end-use. Suggest for which documents to be submitted Any government approved document such as Environment Clearance (EC) or bank documents or board resolution as applicable with respect to clause 5.3 of eligibility conditions.

11 Additional Clarifications: S. No. Clause No. Additional Clarifications 1 Section 15 of Study Method of resource estimation is Polygonal Borehole Influence Method 2 Clause 15, Bid Security In case of second attempt of auction, bidders shall have to submit a fresh Bid Security.