Noting that only 44 of 88 non-coal mineral blocks could be auctioned even after making 145 attempts, mining body FIMI today urged the government to take corrective measures to prevent such situations.
While the government has taken many proactive initiatives for the growth of the mineral sector, there are numerous challenges being faced by the industry, including poor response towards blocks put up for auction and delay in starting operations at an already auctioned mine, the Federation of Indian Mineral Industries (FIMI) said.
"As on July 3, 2018, 88 non-coal mineral blocks were notified for auctions for which 145 attempts were made but the response has not been enthusiastic as only 44 mineral blocks could be auctioned successfully ... Similarly, in respect of coal mines, out of 83 coal blocks allocated so far(31 for auction and 52 for allotment) during last 3-4 years, only eight mines have come into operation," the FIMI said in a statement.
It urged the government to ensure steps and corrective measures to bring the auctioned blocks into production with the least transition time.
And to make this happen, the body suggested "an in-principle approval for the required forest and environment clearances besides acquisition of land may be in place while offering the mineral blocks for auction."
The FIMI further said that it is very essential that after the successful auction of mineral block, the gestation period for the development of mines should be minimised for time-bound commencement of production of minerals from the mines.
The body also said exploration is needed for sustained and strong growth of domestic mining industry as India remains a highly under explored country particularly for non-bulk minerals like gold, diamond, copper, lead, zinc, etc.
"The government brought amendments in the MMDRA Act in January, 2015 followed by promulgation of NMET Rules 2015 wherein apart from GSI and MECL, most of the central and state PSUs were notified as the exploration agencies.
"As many of these entities have limited expertise and infrastructure to undertake exploration, industry feels that the private sector particularly junior exploration companies who have required expertise can play an important role in furthering the exploration activities," the industry body said.
The provision of Non-Exclusive Reconnaissance Permit (NERP) in MMDR Amendment Act, 2015 is also a major constraint for exploration, it said.
Another issue FIMI has raised is the issue of heavy taxes being paid by the miners which it said are not at par with similar charges being paid in other countries.
"Effective tax rates (ETR) works out to be as high as 64 per cent for the existing mines and 60 per cent for the auctioned mines. Apart from the ETR, there are hosts of other taxes, levies and cesses due to which total financial burden goes beyond 100% of the cost of mineral production," it said.
Therefore, there is a need to rationalise the taxation structure for the mining sector for sustainable development and deriving long term benefits in terms of sustained raw material security, it added.
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