Govt sets mine transfer charge at 80% of royalty

Any company that wants to transfer ownership of its non-auctioned captive mines will have to pay the equivalent to 80 per cent of the royalty to the respective state government, the government notified on Wednesday.

"We have decided on this amount - equivalent to 80 per cent of the royalty - keeping the concerns of the cement industry in mind. Earlier, we were thinking of imposing an amount far more than this, but after discussions with the industry, we have come to this extremely reasonable amount," said mines secretary Balvinder Kumar.

Ignoring the apprehensions of some companies, the secretary made it clear that this amount would have to be paid even if the mine is getting transferred from one subsidiary to another in the same company.
 

The Mines and Minerals (Development and Regulation) (Amendment) Bill, 2016, passed by Parliament in Budget session, was introduced by the government for permitting transfer of non-auctioned captive mines. Now, as the rules and transfer charge have been notified, the government expects this to enable companies to sell stressed assets so that banks and financial institutions can recover debts.

Major deals among cement companies such as UltraTech, Reliance Cements, and Lafarge were stuck because the Mines and Minerals (Development and Regulation) Amendment Act, 2015, permitted transfer of mining leases only for auctioned mines. Before the Act, all mines were given by the state governments on a discretionary basis.