Shimla, Aug 27 (IANS): Himachal Pradesh will invite fresh bids for granting mining lease for setting up a cement plant in Chamba district, Industries Minister Mukesh Agnihotri said here on Thursday.

The lease will be granted through auction, he added.

The state had invited applications for the grant of mining lease for setting up a large cement plant based on limestone deposits in Broh Shind in Churah tehsil, the minister said in a written reply in the assembly.

However, this process was put on hold due to amendments in the Mines and Minerals (Development and Regulation) Act of 1957.

As per the new amendments, the grant of mining lease for setting up a cement plant would be done by auction, he said.

Earlier, the minister said the government cancelled a deal with Jaiprakash Industries Associates Ltd for setting up a plant with a capacity of two million tonnes per annum there.

The company had failed to achieve various milestones and the government terminated the memorandum of understanding with it on February 26, 2014.

The government had signed the deal with Jaiprakash Associates in 2007.

"The amended Mines and Minerals (Development and Regulation) Act also provides that all applications for the lease received before June 27, 2015 would become ineligible and the process to refuse the eight applications has been initiated," Agnihotri said.

He said Jaiprakash Associates has also challenged the government's decision to cancel its allotment in the state high court and the matter is pending.