The logjam in the mines sector is expected to be cleared with the promulgation of an ordinance by the President Pranab Mukherjee that provides for auctioning of mines containing iron ore and others besides provision for up to five years of imprisonment for illegal mining.
The Mines and Minerals (Development and Regulation) Amendment Ordinance, 2015 has come into force following the President Pranab Mukherjee giving his assent last evening. The ordinance amends certain provisions of the Mines and Minerals (Development and Regulation) Act, 1957.
According to a government gazette published today, the Ordinance provides for granting mines for 50 years through a competitive bidding route, including e-auction. The Cabinet, chaired by Prime Minister Narendra Modi, had approved the ordinance on January 5.
“Promulgation of Ordinance became necessary to address the emergent problems in the mining industry. In the last few years, the number of new mining leases granted in the country has fallen substantially.
In addition, second and subsequent renewals have also been affected by court judgements. As a result, the output in the mining sector has come down drastically, leading to import of minerals by users of those minerals,” the Mines Ministry said in a release.
The Ordinance empowers the Centre to prescribe terms and conditions and procedure for bidding which include production sharing or royalty payment or a combination of both. The Mines Ministry said it would ensure greater transparency and also an increased share for states from the sector.
Unlike in the 1957 Act, there would be no renewal of any mining concession. The tenure of mineral concession has also been increased from existing 30 years to 50 years. Thereafter, the mining lease would be put up for auction.
The mines, which are already granted before the ordinance, would also be deemed to have been given for a period of 50 years.
“Ordinance provides that mining leases would be deemed to be extended from the date of their last renewal to March 31, 2030 (in the captive miners) and till March 31, 2020 (for the merchant miners) or till the completion of the renewal already granted, if any, whichever is later.
Thus, no mining lease holder is likely to be put into any disadvantaged condition. It is expected that this would immediately permit such closed mines to start their operations,” the Mines Ministry said.
India, once world’s third largest exporter of iron ore, is projected to become a net importer of the steel making raw material due to the logjam in the sector. The Supreme Court had banned iron ore mining due to rampant illegal mining in various states including Karnataka and Goa.
The Ordinance also prescribes setting up of a non-profit trust, District Mineral Foundation, for the welfare of the project-affected people.
“The objective of the District Mineral Foundation shall be to work for the interest and benefit of persons, and areas affected by mining related operations …,” the gazette said.
The holder of a mining lease or a prospecting licence-cum -mining lease would have to pay to District Mineral Foundation in addition to the royalty, but not exceeding one-third of such royalty.
Also there is a provision for setting up National Mineral Exploration Trust and the holder of the lease or a prospecting licence-cum-mining lease would pay 2 per cent of the royalty.
“The object of the Trust shall be to use the funds accrued to the Trust for the purposes of regional and detailed exploration …,” it said.
Violators would be punished with fines of upto Rs 5 lakh per hectare of the area and imprisonment for up to five years. Further, a provision has been made for constitution of special courts by the state government for fast-track trial of cases related to illegal mining.