Amendment to the Mines and Minerals (Development and Regulation) Act, 1957
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for the amendment to the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act, 1957). The amendment will allow transfer of captive mining leases not granted through auction.Transfer of captive mining leases, granted otherwise than through auction, would allow mergers and acquisitions of companies and facilitate ease of doing business for companies to improve profitability and decrease costs of the companies' dependent on supply of mineral ore from captive leases. The transfer provisions will also facilitate banks and financial institutions to liquidate stressed assets where a company or its captive mining lease is mortgaged. The amendment will benefit lessees desirous of transferring the captive leases not granted through auction. It will also benefit banks and financial institutions. It does not entail any recurring or non-recurring expenditure on the Government.
Background:
The MMDR Act, 1957, as amended through the MMDR Amendment Act, 2015, restricted the scope of transferability of concessions granted through auction. It was restricting the mergers and acquisitions of companies and was impeding the ease of doing business for companies dependent on supply of mineral ore from captive leases. The provision was coming in the way of banks and financial institutions to liquidate stressed assets where a company or its captive mining lease is mortgaged.
