New Act to cut red tape in mining project clearance

Written by Rituparna Bhuyan | New Delhi | Updated: Dec 27 2009, 04:17am hrs
To ensure that investments in the mining sector are not jeopardized by the umpteen layers of red tape involved in getting clearances, the new Mines and Minerals Development and Regulation (MMDR) Act envisages setting strict timeline for the official machinery to process files. If a project clearance gets held up beyond these time limits at any level, investors will be able to seek the intervention of Special Mining Tribunals that will be set up.

An analysis shows that prospecting applications have to pass through 126 officials at the state and Centre level. There are instances when even after prior approval has been granted by the Centre, states take as many as four years to clear applications. We want to streamline the process under the new mining regime, said a mines ministry official. Under the new Act, states will have to dispose of reconnaissance and prospecting applications within three months after applications are received. Time limits have also been set up for granting of mining leases. One would have to bid for a mining lease under the new regime.

Moreover, states would have to issue the letter of intent within three months after bids are opened. The lease would have to be executed within three months of receipt of the letter of intent. While states have been given sweeping powers under the draft MMDR Act, it proposes to set up mining tribunals at the Centre and state level to ensure that states use their newfound power responsibly. The tribunals would be empowered to intervene if permissions are delayed or given in an unfair manner. More importantly, the central tribunal will have powers to modify or set aside decisions of state governments. Also, if a particular application is held up in a specific office, the Tribunal can bypass that part of the clearance process unilaterally.

If any person willingly fails to comply with the order of the National Mining Tribunal, he shall be punishable with fine which may extend to one lakh rupees, the draft MMDR Act says. While the central tribunal will deal with applications related to major minerals like iron ore and copper, the state tribunals will be responsible for cases related to minor minerals like marble.

According to the mining ministry, the central government should only play a regulatory role in the new mining regime while powers to grant permissions for mines should be given to states. Under the current system, states have to send mining applications to the central government for getting prior approval. Under the new Act, it has been proposed that to gives states full responsibility of granting mining-related permissions.

The Act proposes that the principal Bench of the National Mining Tribunal would be headed by a chairman and comprise six members. At least three of these members would have to have a of minimum 10 years of experience in handling legal matters. The chairman would have a five-year tenure (or up to a maximum age of 67 years).

The composition of the state tribunals would be decided by the state governments, in consultations with the central government. The powers of these tribunals are similar to that of the national tribunals, but will be confined to applications of minor minerals only. The proposed MMDR Act was supposed to be introduced in the just-concluded Winter Session of Parliament to replace a 1957 legislation. But as inter-ministerial consultations could not be wound up in time, it will have to wait till Parliament reconvenes for the Budget session or even the Monsoon Session in 2010.