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Union Mines Minister Narendra Singh Tomar said on Friday mines of as many as 10 minerals, including iron ore and bauxite, will be auctioned for the first time under simplified and transparent rules to attract investment in the sector. With the Parliament approving the Mines and Minerals (Development and Regulation) Amendment Bill, 2015, the government expects that allocation to become transparent and corruption to stop, he said.
Tomar said exploration would get a big boost with the new law and mines will be allocated through e-auction, similar to the process used for allocating coal mines. "Mines of 10 major minerals, coming under the Central government, will be allocated only through auction now," he said.
"This will bring in much needed transparency in the allocation process and kick-start the mining sector which was languishing for want of clear guidelines," said Chandrajit Banerjee, director-general, Confederation of Indian Industry (CII).
India was once the world's third-largest exporter of iron ore, but is importing heavily now after court-ordered action against illegal mining in states such as Goa and Odisha, etc.
The Bill, which replaces the Mines and Minerals (Development and Regulation) Amendment Ordinance, 2015 promulgated on January 12, 2015, amends the Mines and Minerals (Development and Regulation) Act, 1957.
The Mines and Minerals (Development and Regulation) Act, 1957 regulates the mining sector in India and specifies the requirement for obtaining and granting mining leases for mining operations.
While the current law provided for a mining lease of a maximum 30 years and a minimum of 20 years, which could be renewed for another 20 years, the new Act provides for a 50-year mining lease.
"The long tenure of licences of 50 years and well defined Centre-state powers, provided in the MMDRA Act, will help build industry confidence in the process and attract investments," said Banerjee.
On expiry of the lease, instead of being renewed, the leases shall be put up for auction, as specified in the Act.
The Bill provides that the Central government might reserve particular mines for a specific end-use and allow only eligible end users to participate in the auction.
Tomar said the Bill provides for the creation of a District Mineral Foundation (DMF) for the welfare of persons in districts affected by mining related operations.
Licensees and lease holders shall pay the DMF an amount not more than one-third of the royalty.
A National Mineral Exploration Trust (NMET) shall also be established by the central government for regional and detailed mine exploration. Licencees and lease holders shall pay the NMET two percent of royalty.
