Reforms in non-coal mining: Ministry starts consultations to fine-tune proposals

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Published: June 9, 2020 1:40 AM

According to an order issued by the mines ministry on June 3, the system of embedded clearances will be tried in at five greenfield blocks in each mineral-rich state on a pilot basis, with an intent to scale it up over time.

“We are in discussion with other ministries. Once that is done, we will take them before the cabinet for its approval,” a senior mines ministry official said.“We are in discussion with other ministries. Once that is done, we will take them before the cabinet for its approval,” a senior mines ministry official said.

The ministry of mines has started a consultation process with other ministries on key reform proposals including introduction of seamless exploration-cum-mining-cum-production regime and doing away with the distinction between captive and non-captive mines before the cabinet for its approval.

“We are in discussion with other ministries. Once that is done, we will take them before the cabinet for its approval,” a senior mines ministry official said.

The proposal to introduction of the seamless exploration-cum-mining-cum-production regime of virgin areas had been among the long-pending wish-lists of the mining industry. Announcing the reform proposals on May 16, as part of the Atmanirbhar package, finance minister Nirmala Sitharaman had said five hundred blocks would be offered through this open transparent mechanism, without giving any time-frame.

Proposal was also there to do away with the existing cumbersome and distinction between captive and non-captive mines. The finance minister had also announced the concept of joint auctioning of bauxite and coal mines for the aluminium sector.

Meanwhile, the mines ministry has come out with a scheme under which non-coal, non-fuel mining blocks will have most clearances ready before these are put up for auction.

According to an order issued by the mines ministry on June 3, the system of embedded clearances will be tried in at five greenfield blocks in each mineral-rich state on a pilot basis, with an intent to scale it up over time.

A government-level project monitoring unit (PMU) will be tasked with the mandate to obtain the clearances – in fact, the PMU will be the applicant for the assorted clearances required for a mining project. All expenses related to the approvals will be recouped from the successful bidders later.

As many as 20 clearances are required before the mining can start, including the environmental and forest clearances, and the approval process is tedious. On an average, environmental and forest clearances take 270 and 530 days, respectively, at present.

Apart from the sticky regulatory issues and the tedious delays associated with grant of environmental and forest clearances, the enormity of taxes and levies also continue to be an irritant for investors in non-coal mining, where India’s performance is far below potential, making it vulnerable to huge import bills. Indian levies, on average, are 40-45% (without including the corporate tax) compared to 5-14% globally.

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