LoI delay and stock surge raise concerns

Jaipur: In a startling turn of events, Rajasthan’s first gold mine in the Jagpura-Bhukia area of Banswara has become the subject of controversy even before mining operations have started. Syed Owais Ali’s firm, Owais Metal, secured the bid for the mine during an online auction, placing a bid 65.3% above the reserve price. The firm deposited the first instalment of Rs 100 crore on July 5, 2024, yet the state government has yet to issue the Letter of Intent (LOI), and mining has not even begun.

Meanwhile, Owais Metal’s stock prices have surged dramatically, jumping from Rs 274 to Rs 1,569 after the auction announcement, and currently trading around Rs 1200 per share. Experts believe the company has made a profit of over Rs 1,000 crore.

The case has now reached international arbitration as an Australian mineral company, which had previously conducted a gold ore survey in the area, is contesting the mining rights. The matter is delaying the issuance of the LOI, and if the arbitration does not go in favour of the state, the Rs 100 crore deposit might need to be refunded to the company.

This development raises questions about whether the company had any right to claim the gold mine without an LOI and whether the stock price surge was part of a strategic move to benefit from the mine’s potential. The issue also casts doubts on the role of Rajasthan’s Mining Department and its officials in the process, with concerns about the transparency and legality of the proceedings.