(1)

Upon completion of the auction process, the preferred bidder shall submit a performance security in the manner specified in sub-rule (1) of rule 19 and upon receipt of such performance security, the State Government shall issue a letter of intent to the preferred bidder.

(2)

On receipt of the letter of intent the preferred bidder shall be considered to be the successful bidder upon fulfilment of the following conditions, namely:-

(a) compliance with all the terms and conditions of eligibility;

(b) obtaining all consents, approvals, permits, no-objections and the like as may be required under applicable laws for commencement of prospecting operations; and

(c) submitting the Scheme of prospecting.

(3)

Upon fulfilment of the conditions specified in sub-rule (2), the State Government shall grant a Composite Licence to the successful bidder and such Composite Licence shall be subject to the provisions of the Act and the rules made thereunder, as applicable to a prospecting licence and mining lease.

(4)

The minimum area for grant of a Composite Licence shall not be less than the minimum area for which a mining lease may be granted in accordance with the provisions of the [Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016] [Substituted 'Mineral Concession Rules, 1960' by Notification No. G.S.R. 1469(E), dated 30.11.2017 (w.e.f 20.5.2015).] and the maximum area shall be in accordance with section 6 as applicable to a prospecting licence.

(5)

The holder of a Composite Licence shall conduct geological exploration of the area under the Composite Licence so as to ascertain evidence of mineral contents and shall submit periodic reports in accordance with the Act and rules made thereunder, as applicable to a prospecting licence and all reports, studies and other documentation related to the geological exploration of the area under the Composite Licence shall be submitted to the State Government and Indian Bureau of Mines.

(6)

If a holder of a Composite Licence,-

(a) fails to complete prospecting operations in accordance with sub-section (9) of section 11 or fails to establish the existence of mineral contents in accordance with sub-section (10) of section 11, and the Minerals (Evidence of Mineral Contents) Rules, 2015, such holder shall not be eligible to receive a mining lease and the Composite Licence shall be terminated;

(b) completes prospecting operations in accordance with sub-section (9) of section 11 resulting in determination of evidence of mineral contents conforming to the Mineral (Evidence of Mineral Contents) Rules, 2015, such holder shall make an application to the State Government for grant of a mining lease accompanied with the first instalment, being ten per cent. of the upfront payment:

(7)

Upon receipt of the duly completed mining lease application and the first instalment of the upfront payment as specified in clause (b) of sub-rule (6), the State Government shall issue a letter of intent for mining lease.

(8)

A Mine Development and Production Agreement shall be executed between the State Government and the holder of Composite Licence if the holder of a Composite Licence-

(a) continues to comply with the terms and conditions of eligibility;

(b) pays the second instalment being ten per cent. of the upfront payment;

(c) furnishes the enhanced performance security as specified in sub-rule (2) of rule 19;

(d) satisfies the conditions specified in clause (b) of sub-section (2) of section 5 with respect to a mining plan;

(e) obtains all consents, approvals, permits, no-objections and the like as may be required under applicable laws for commencement of mining operations; and

(f) satisfies such other conditions as may be specified by the State Government with the prior approval of the Central Government.

(9)

The holder of the Composite Licence shall pay the third instalment being eighty per cent. of the upfront payment, subsequent to execution of the Mine Development and Production Agreement, and upon such payment, the State Government shall execute a Mining Lease Deed with the holder of the Composite Licence within thirty days of the date of completion of all the conditions specified in sub-rule (8).

(10)

The mining lease shall be subject to the provisions of the Act and the rules made thereunder.

(11)

The mining lease shall be for minerals found in the area pursuant to exploration prior to the auction:

Provided that where subsequent to the auction, any new mineral is discovered, then the holder of the mining lease shall follow the provisions of the [Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016] [Substituted 'Mineral Concession Rules, 1960' by Notification No. G.S.R. 1469(E), dated 30.11.2017 (w.e.f 20.5.2015).] for inclusion of such new mineral in the Mining Lease Deed.

(12)

Where prior to the auction or subsequent to the auction, presence of minor mineral is established or discovered, such minor minerals shall be dealt in accordance with such rules as may be made by the State Government under section 15.

(13)

The date on which a duly executed Mining Lease Deed is registered shall be the date of commencement of the mining lease.