Govt to scrap prior approval clause in MMDR to speed up coal mining leases

Centre believes the clause results in duplicity and complexity of efforts; even after lease is granted, it takes time for lessee to start actual mining operations

Aiming to speed up coal mining leases and boost ease of doing business, the Centre is in the process of amending the Mines and Minerals (Development and Regulation) Act to do away with the “prior approval clause”. 

The Centre is of the view that the aforesaid clause results in duplicity and complexity of efforts due to which even after a lease has been granted, it takes time for the lessee to commence actual mining operations. The move comes in wake of the Centre adding another four coal mines to the existing 42 that will be put up for auctions and allocation during October 10 to November 8.

Under the current framework, after block operators or the lessees obtain the mandatory forest and environment (F&E) clearances and approach the state government for allotment, the state government again approaches the Centre to seek its approval. 

The amendment is expected to do away with the process of state governments obtaining the approval entirely and lessees will be required to obtain the F&E clearances and approach the state government directly for allotment.

“We are in the process of amending it to get rid of it. The draft (for amendment) is under preparation and hopefully can be tabled in the next session of the Parliament”, coal secretary Sumanta Chaudhuri said here on the sidelines of an event organised by FICCI here.

He said that it will speed up the process and will remove the “unnecessary delay” in commencing operations by the block operators. The coal ministry expects that removal of this clause from the Act will lead to saving of 6-8 months of time.

It comes at a time when the Centre is gearing up for the 8-11th tranche of coal block auctions where previously, it had decided to offer 29 mines in the auctions and allot another 15 to the state and public sector enterprises. 

“In addition to the previous 42 mines, another four mines will be added; so the total mines put up on the auctions and allotment will go up to 46”, Ashish Upadhyaya, joint secretary at the coal ministry said.

According to Chaudhuri, the Centre is also encouraging exploration companies to get empaneled with the coal ministry to boost exploration. Currently, several government agencies alongwith Central Mine Planning and Design Institute – a Coal India subsidiary – is engaged in exploration activities.

“Exploration is an area where there are few players with both the mandate and the capability to do the job. It is something we are embarking on to boost both the public as well as the private sector to enter the field of exploration”, he said.

Before the auctions commence, the Centre is reaching out to coal-rich states like West Bengal, Odisha, Jharkhand and others to discuss various issues which the states, mine developers, operators and other companies are facing.

On the other hand, Chaudhuri said that the Centre may now enforce a legal provision whereby companies, which have captive coal mines, will have to reduce their dependency on supply linkages from Coal India gradually. Although this clause is existent, it hasn’t been invoked yet.