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New Bill wants Mining Leases Auctioned

The Pioneer, New Delhi, 5th December, 2014
 
Animesh Singh

In a breakthrough development, the NDA Government has finalised the much awaited Mines and Minerals (Development and Regulation) Amendment Bill 2014 or the MMDR Amendment Bill, which allows allotment of mining leases (MLs) for notified minerals like iron ore via competitive bidding through auction method.

 

According to highly placed sources, the auction clause has been introduced in the Bill to improve transparency in the allocation process as well as to ensure a fair share of the value of minerals for the Government.Another significant clause in the Bill provides for making illegal mining of notified minerals, like iron ore, bauxite, manganese and limestone, a cognizable offence. The Bill has categorised minerals found in bulk or those which are not deep-seated as notified minerals, whereas deep-seated or difficult to access minerals have been categorised as non-notified minerals.

 

The legislation has also kept a provision to allow State Governments to set up special courts for trial of offences pertaining to illegal mining under the Act, if felt necessary. The Bill is all set to be introduced in the ongoing Winter Session of Parliament and sources indicated that the Government is keen on getting it passed also.

 

All the consultations with stakeholders concerned, namely mining companies, have been completed, sources told The Pioneer, though only some oral representations between the industry representatives and the Mines Minister Narendra Singh Tomar are to take place in a day or two to iron out the rough edges in the draft Bill.

 

Once this is done, the draft legislation is likely to be taken for Cabinet approval in a week’s time, before it is introduced in Parliament.The new amended legislation though is silent on the key provision of the lapsed MMDR Bill 2011 (which it is set to be replaced) that had earmarked 26 per cent of profit of coal mining companies to be shared with people affected by mining operations.

 

However, it says that in order to earmark funds for benefit of persons affected by mining as also for the rebuilding of infrastructure in mining affected areas, a District Mineral Foundation (DMF) in every district affected by mining should be set up. This will be funded by an additional levy related to royalty, the rate of which will be prescribed by the Centre.

 

Further in the case of notified minerals, the Government has included a clause in the draft Bill which says that given the state of current knowledge related to these minerals, it is proposed that there is no need to issue any Reconnaissance Permits (RPs) or Prospecting Licences (PLs) for such minerals.

 

In case there are any gaps in the required knowledge of notified minerals, they will have to be filled up by the State agencies themselves, says the Bill. This procedure is in line with recommendations of the High-level Committee on National Mineral Policy (known as the Hoda Committee). Bulk minerals such as iron ore, limestone, manganese, and bauxite among others, which the Bill seeks to put in the category of notified minerals, account for 85 per cent or more of the value of mineral production in India.

 

In the case of non-notified minerals also, the Amendment Bill seeks to grant a combined PL-cum-ML for these minerals through a competitive bidding process.

 

The scheme envisages that the successful bidder will conduct the exploration and prospecting work at his own risk and cost. In case there is any find, he will have to abide by the bid conditions which could be in the form of a production share, or a payment linked to the royalty payable etc, says the draft Bill. The Bill empowers the Centre to set the conditions for conduct of auctions both in respect of notified minerals as well as non-notified minerals. Also it allows the Centre to prescribe different terms and conditions for auctions of different types of minerals and their application to different States.