Mines ministry comes out with reform proposals – check details

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August 29, 2020 4:30 AM

“Proposal is there to remove the provision of earmark any mine for captive purpose during auction, henceforth, all the blocks will be auctioned without any end use restriction,” it said.

The mines ministry has sought comments from the stakeholders on these proposals till September 3.The mines ministry has sought comments from the stakeholders on these proposals till September 3.

The mines ministry has come out with a slew of reforms proposals, including amending the contentious provisions of 10A(2)(b) and 10A (2)(C) of the Mines and Minerals (Development and Regulation) Act, to pave the way for auctioning of around 500 potential leases stuck in legacy issues now.

Section 10A(2)(b) deals with leases where reconnaissance permit or prospecting licence were granted; while 10A(2)(c) relates to grant of mining leases (ML). The mines ministry has sought comments from the stakeholders on these proposals till September 3.

“These (blocks) can neither be granted because the time period to grant them is already over, nor can they be brought to auction because of legal impasse. These cases coming under section 10A (2)(c) of the Act which stood extinguished in January 12, 2017, as per the law, but are still litigated or pursued unnecessarily at various level, need to be brought to a closure to end the policy stalemate,” the ministry said in its proposal.

The cases coming under Section 10A (2)(b) of the Act are still disputed in the absence of a specific sun set clause in the Act, and they have not reached closure till date. Section 7 of the MMDR Act provides for maximum period of five years for completing the prospecting operations. These amendments came in effect on January 12, 2015, and the maximum period of five year for prospecting has also lapsed on January 12, 2020.

“In both the cases, a large number of potential mineral bearing areas are blocked and are not contributing towards mineral production and employment generation. Since continuing with the existing provisions of 10A(2)(b) and 10A(2)(c) will also cause huge financial loss to the state exchequer, the amendment Bill seeks to amend the existing provision of Section 10(A)(2)(b) and 10A(2)(c), and reallocation of such mineral blocks through transparent method of auction,” the ministry said.

However, it is also proposed for appointment of an authority to decide the value of expenditure incurred for exploration in such legacy cases whose rights will be terminated and to reimburse the exploration expenditure from funds under National Mineral Exploration Trust (NMET).

Among the proposals is also to remove distinction between captive and merchant mines by ensuring that in future all mines are auctioned without any end-use restriction. Further, the right of the first refusal available to existing captive mines will also be removed. The existing limit of allowing sale of 25% of total mineral excavated in the previous financial year, for which end use was specified is also proposed to be to increased to 50% for the auctioned captive mines beyond their captive use volumes.

“Proposal is there to remove the provision of earmark any mine for captive purpose during auction, henceforth, all the blocks will be auctioned without any end use restriction,” it said.

There is also a proposal to develop a comprehensive and broad-based mineral index for determination of levies and taxes on the lines of recently launched National Coal Index. A committee will be set up to develop the National Mineral Index in which representatives of the state government will also be inducted. The National Mineral Index will determine the value of the mineral that will form the basis for calculation of royalty and other such levies of selected minerals.

In case of large mining blocks with very high quality of resources which are not brought into production for many years resulting in sub-optimal utilisation of valuable national mineral resources, the amendment Bill will also seek to amend the relevant provision of the Act for vesting back of such allocated non-working mines of private companies, which are not made operational within three years to the concerned states for reallocation through auction. Similarly, virgin areas allocated to PSUs and are not brought into production are also proposed to be reviewed and vested back to the government.

The mines ministry also proposed to seek amendment the relevant provision of the Act and rules to make National Mineral Exploration Trust functioning fully as an autonomous body.

It will also seek to amend rules to clarify the definition of illegal mining. At present, there is no distinction between illegal mining done outside the leasehold area and mining done in violation of various clearances and approvals inside a mining lease area.

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