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The Centre has removed the requirement for states to obtain conservation clearance before auctioning mining licences.
The final mineral auction rules do not clarify whether the Centre will provide such clearances to state governments before bidding.
The draft rules proposed state governments obtain conditional clearance “on the basis of recommendation of the committee constituted for the purposes of forest clearance under the Forest (Conservation) Act, 1980, and wildlife clearance under the Wild Life (Protection) Act, 1972”.
This condition was opposed by Haryana, Rajasthan and Gujarat, which said the law did not permit them to get such clearances. According to the state governments, the central government or the company proposing the mining project should be responsible for getting the clearances.
Heeding their demand, the Centre dropped this condition in the final rules.
The Centre, however, did not change the rate of performance security that companies must pay after winning a mining licence. The government has not changed the interest rate of 24 per cent per annum a company must pay if it delays any government dues for more than 60 days.
The company with the winning bid must pay half a percentage of the “value of resources” upfront to the state government. It must also pay 0.5 per cent or 0.25 per cent of the value of resources as performance security to the state government when it is awarded a mining or composite licence, respectively.
The value of resources will be calculated by multiplying the estimated mineral resources in the area with the average 12-month price of the mineral published by the Indian Bureau of Mines.
If a state government can prove mineral content, it can directly auction composite licences. If a state has adequate evidence of mineral content, it can auction mining licences.
MINING MECHANICS
The final mineral auction rules do not clarify whether the Centre will provide such clearances to state governments before bidding.
The draft rules proposed state governments obtain conditional clearance “on the basis of recommendation of the committee constituted for the purposes of forest clearance under the Forest (Conservation) Act, 1980, and wildlife clearance under the Wild Life (Protection) Act, 1972”.
This condition was opposed by Haryana, Rajasthan and Gujarat, which said the law did not permit them to get such clearances. According to the state governments, the central government or the company proposing the mining project should be responsible for getting the clearances.
Heeding their demand, the Centre dropped this condition in the final rules.
The Centre, however, did not change the rate of performance security that companies must pay after winning a mining licence. The government has not changed the interest rate of 24 per cent per annum a company must pay if it delays any government dues for more than 60 days.
The company with the winning bid must pay half a percentage of the “value of resources” upfront to the state government. It must also pay 0.5 per cent or 0.25 per cent of the value of resources as performance security to the state government when it is awarded a mining or composite licence, respectively.
The value of resources will be calculated by multiplying the estimated mineral resources in the area with the average 12-month price of the mineral published by the Indian Bureau of Mines.
If a state government can prove mineral content, it can directly auction composite licences. If a state has adequate evidence of mineral content, it can auction mining licences.
MINING MECHANICS
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States won’t need to get any wildlife or forest clearance before auction
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Centre had faced stiff opposition from states, as the former had proposed the latter would get these clearances
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However, it is not clear as to who will obtain these clearances — the central government or the mining company
- Rate for upfront payment and performance security remains unchanged
