Govt allows re-auction of mining leases before expiry

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New Delhi | Published: April 20, 2018 6:32:03 AM

To preempt crunch in supply of non-coal minerals when 288 merchant mining leases expire in April 2020, the government has amended the rules for mineral concession and development to pave way for re-auctioning of these leases even before their expiry.

mining leases, iron ore, Indian Bureau of Mines, MMDR Act, Madhya Pradesh, karnatakaNew leases would require about three-four years to be executed after all due clearances. (PTI)

To preempt crunch in supply of non-coal minerals when 288 merchant mining leases expire in April 2020, the government has amended the rules for mineral concession and development to pave way for re-auctioning of these leases even before their expiry. Early start of the auction process for these mines, containing minerals such as iron ore, manganese ore, bauxite and limestone, would ensure production is not disrupted for a long period. New leases would require about three-four years to be executed after all due clearances.

The new rules, notified recently, prescribe that existing leaseholders would carry out general exploration (G2) over the entire mineralised area under the lease before April 2019 and submit a geological study report to the state government and the Indian Bureau of Mines (IBM) within a month of the completion of the exploration work. The Mineral Concession and Development (Amendment) Rules, 2018 also mandate leaseholders to submit a modified mineral plan to the states and the IBM for completion of the general exploration within 45 days of the notification.

Failed to apprehend the impact of the closure of non-captive mines, the Mineral Conservation and Development Rules, 2017, notified on February 27, suggested, “In the case of existing mining leases detailed exploration (G1) over the entire potentially mineralised area under the mining lease shall be carried out within a period of five years from the date of commencement of these rules.”

This essentially means that exploration on existing mines could start only towards the end of 2022, more than two years after the expiry of these non-captive leases. However, the mines ministry later realised the embedded flaws in the rules and started the process of rectifying those as early as August last year. In a letter, written to state chief secretaries, mines secretary Arun Kumar wrote, “To ensure that there is no fall in production in the mineral sector, it is important that there is orderly transition of these expiring to the new leases by way of auctioning, as per the MMDR Act, 1957.”

“Though the leases expire on 31.03.2020, it would be appropriate for the states to start auction of the mines by 01.07.2019. This will give successful bidders time to mobilise as well as time to obtain various clearances before commencing mining operations. It is, therefore, of utmost importance that an action plan for auctioning these expiring leases is prepared at the earliest,” Kumar wrote.

Of the 288 merchant mines, 160 are located in Goa, 45 in Karnataka, 30 in Odisha and 14 are in Madhya Pradesh, among others. Only 59 of the total are operating. The total value of mineral production (excluding atomic & fuel minerals) during 2017-18 has been estimated at `1,13,541 crore, which shows an increase of about 13% over that of the previous year.

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