The Centre has directed all states to discontinue the extant “discriminatory” process and start following “transparent” means for awarding leases even for “minor minerals” like gypsum, mica, quartz and sand, among others.
Auction has been made mandatory for the grant of all mineral concessions under the recently amended MMDR Act and the process for adoption of this method has already been kickstarted for major minerals.
The move to extend the principle to minor minerals also conforms to several judgements by the Supreme Court that all the grants of mining concessions and allocation of mines must be fair, reasonable, non-discriminatory, transparent, non-capricious and non-biased. The apex court has also said that the process should not be tainted by either favouritism or nepotism.
“The central government, in the exercise of its power under Section 20A of the MMDR Act, 1957, directs that the state government should take necessary steps to ensure that the complete process relating to grant of mineral concessions of minor minerals, is made fair, transparent and non-discriminatory,” Union mines secretary Balvinder Kumar wrote to all state chief secretaries on August 17.
“It is, therefore, requested that your government should review/revisit the mechanism/procedure relating to grant of concessions/leases of minor minerals expeditiously and take steps to ensure compliance of the principles laid down by the Supreme Court,” he added.
The domestic mining industry would certainly oppose the proposal as it has been vocal against the introduction of the auction route even for major minerals such as iron ore and bauxite on the grounds that mine allocations hardly go under the hammer in most countries and that it would escalate their costs.
There were 24 minor minerals such as gravel, ordinary clay, sand and limestone used for lime burning and boulders, among others, till the government earlier this year notified 31 more such minerals, including china clay and chalk, taking their number to 55. These 31 minerals, earlier considered major minerals, account for over 55% of the total number of leases and nearly 60% of total leased area.
According to the MMDR (Amendment) Act, 2015, in areas where the existence of mineral contents of any notified mineral is established, the state shall notify such areas for the grant of leases following the terms and conditions prescribed by the Centre. In cases where there is inadequate evidence of the existence of mineral contents of any notified mineral, a state, after obtaining approval of the Central government, may grant a prospecting licence-cum mining lease.
The process of allocation of minor minerals through the transparent auction route had been discussed in the meeting of the central co-ordination-cum-empowered committee meeting of the mines ministry on August 4. Many states have already taken steps in the direction of instituting transparent and non-discriminatory process for grant of mineral concession. Some states even said that they had achieved encouraging results after the introduction of the auction mode for the grant of mining leases.