The high bid premiums quoted in recent auctions of iron ore mining leases in Karnataka and Odisha are at once a cause for cheer and caution.
The states obviously have reason to cheer. With the bid premiums going up to 150% of the iron ore prices notified for Odisha by the Indian Bureau of Mines (IBM), they are looking at huge revenues – estimated to be in thousands of crores.
However, the bidding aggression is a cause for concern, given that the premium is over and above the cost a winning bidder will incur on mining.
