Coal news and updates

Govt plans to start auction of all minerals soon

December 3: The Government of India is planning to introduce a transparent process for competitive bidding for all minerals by amending the Mines and Mineral Development and Regulation (MMDR) Act and is aiming to kickstart the first round of auction by March 2015, according to Secretary (Mines) Anup Kr Pujari.

A draft of the MMDR Act is available on the website of the Ministry of Mines for the past few weeks and suggestions have been invited from stakeholders quickly to finalise the Act before it can be placed in Parliament, he said.

"Once the amendments become law, we will begin auction within three months," Pujari, said on the sidelines of CII-organised IMME and Global Mining Summit 2014 in Kolkata.

Pujari said he was hopeful the amendments would get passed in the current Parliament session unless the same goes to the Standing Committee.

Comments from stakeholders will be accepted for public review of the nine-page draft amendment Bill document till December 10.

Pujari said top priority in this amendment is getting an allocation process that has public acceptance.

Pujari said the government is trying to get the momentum back in the mining sector and hopes to do it soon.

"We should have a system of allotment which doesn't invite public dissatisfaction. But whether it is economically the best way, is a separate issue," he said.

Asked to elaborate, Pujari said any process has its pitfalls but tendering appears to be more appropriate as compared to nomination. The likelihood of getting into legal challenges would be much less "if we go for auction".

He said state governments are yet to send their feedback despite the ministry writing to them.

The draft proposes to introduce a redressal mechanism in which a company can approach the Centre in case the state government has not given an order or decision about any application within 60 days.

At present, an applicant can approach the Centre for a respite only after the state has given an order on the application.

The NDA government is trying to get the amendment Bill passed in the Winter Session of Parliament itself to clear the bottleneck in terms of mining lease renewals.

This was to bring in a momentum in actions in the mining sector, which has suffered in the past few years in the country. Most of the active mines in the various states, in absence of lease renewal, were continuing operations on deemed renewals.

The Mines and Minerals (Development and Regulations) Act, 1957, and Mineral Concession Rules, 1960 permitted such “deemed” renewals. However, a Supreme Court-guided recent amendment in the law ended the practice of deemed extensions.

In fact, Jharkhand, which did not regularise the renewals, stopped almost all mining operations in the state from September 5 this year. This has also led to several litigations by affected miners.

The amendment also provides a new dispute resolving mechanism through setting up of a tribunal. The ministry has also proposed unbundling of minerals for the purpose of applications for prospecting and mining licences. Bulk minerals such as iron ore, coal, manganese and bauxite will require one single application both for prospecting and mining.

He said the government was trying to unbundle the sector and do away with regulatory permits for certain notified minerals. The Bill prescribes competitive bidding by auction as the method to be followed for allocation of mining leases for notified minerals. Reconnaissance permits or prospecting licences is proposed to be done away with for these minerals.

The minerals which are proposed to be notified would include iron ore, limestone, manganese and bauxite. The amendment Bill seeks to differentiate between bulk surface minerals and deep-seated, difficult-to-access minerals such as gold, zinc, molybdenum. Bulk minerals account for 85% or more of the value of mineral production in India. These will be subject to different procedures.

Attracting private investment and eliminating delays are among the main objectives of the Mines and Minerals (Development and Regulation) Amendment Bill, he said.

Under this, illegal mining is proposed to be declared as a cognizable offence with provisions for enabling state governments to set up special courts to try such offenders.

It may be mentioned that the previous government at the Centre had also planned to introduce an amended MMDR in 2011 to repeal the 1957 Act. However, it could not pass the legislation and it had lapsed.