Cabinet to take up proposals on mining reforms soon

A clutch of proposals to reform the rules governing non-coal minerals will likely come under the consideration of the Cabinet soon.

According to a draft Cabinet note prepared by the mines ministry, introduction of mining licences that offers with certainty tenure, ranging from the exploration to production stages, and removal of the distinction between captive and non-captive mines will be among the salient features of the new regime. The changes will also pave the way for re-auction of some 500 odd leases that are embroiled in legal disputes and legacy issues.

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. The objective of these changes is to attract more investments in the sector, including from foreign players.

“As regards the policy announcements under the Atmanirbhar Bharat Abhiyan, a comprehensive Cabinet note containing all proposals is already under submission to higher authority and on approval, would be put up for the cabinet,” the mines ministry said in the note, reviewed by FE.

Coal secretary Anil Kumar Jain, who also holds the charge of the mines secretary, said in Kolkata on Friday the roll-out of the reforms in the mining sector would take 6-8 weeks.

The first set of coal mines under the commercial mining policy has been auctioned off recently — most winning bidders offered handsome amounts as revenue share to the government, in some cases 40-40%. Jain said, “We expect commercialisation of mines to bring competitiveness and a level-playing field between PSUs and private players.” In the next 5 to 6 years, the mining sector is said to increase direct employment by 7 lakh and indirect employment by over 20 lakh, Jain said.

The proposal to introduce 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, finance minister Niramala Sitharaman had said five hundred blocks would be offered through this open transparent mechanism, without giving any time-frame.

The proposal was also there to do away with the existing 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.

The mines ministry put up the proposals along with proposed required amendments in the Mines and Minerals (Development and Regulation) Act and rules thereunder for public comments. Initially, the last date for submitting comments was September 10, which was extended to September 24.

Among the proposals, an important one was on amending the contentious provisions of Sections 10A(2)(b) and 10A (2)(C) to allow grant of around 500 potential leases blocked 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 had received 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,” mines ministry said in its proposal.

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.

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.