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    HomeBusinessMines ministry eases rules for non-coal minerals licensing

    Mines ministry eases rules for non-coal minerals licensing

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    Since the mandatory auction regimed kicked in with the amendment of the MMDR Act, 1957, around 180 mineral blocks have been auctioned so far.

    To give further impetus to the non-coal, non-fuel mining sector, the mines ministry has proposed another set of reforms including dispensing with the need for the states to obtain Centre’s prior approval for awarding composite licence (prospective-cum-mining) for blocks bearing bauxite, limestone, manganese and iron ore through the mandatory auction route.

    The ministry proposes to do away with the section 10B (2) of the governing Mines and Minerals (Development and Regulation) Act that mandates the states to seek prior approval as it feels appropriate “to remove the redundant process” since only reconnaissance survey (G4) level of exploration is required for initiating auction process for composite licence (CL).

    Through a number of reforms initiated last year, the Centre allowed auction of blocks for CL at G4 level of exploration instead of previously prescribed G3 (preliminary exploration) level.

    “As the level of exploration has been reduced at the CL stage, it would be appropriate to remove the redundant process of obtaining previous approval of the central government before putting a block for auction of CL. This will enable the state governments to put blocks in auction for CL at a faster pace. Accordingly, section 10B (2) of the Act may be amended,” the mines ministry said in a note put for stakeholders’ comment.

    Since the mandatory auction regimed kicked in with the amendment of the MMDR Act, 1957, around 180 mineral blocks have been auctioned so far.

    The mines ministry also proposes to do away with the requirement of forest clearance for exploration, agreeing to the suggestion of a high-level committee of the NITI Aayog that had recommended,” there should not be any requirement of forest clearance for undertaking exploration.”

    The ministry of forest and climate change had, in a consultation paper, issued in October last year also proposed, “particularly in such activities where the impact is not perceptible, the provisions of the Act (Forest Conservation Act, 1980) may not be applicable.

    “In order to enable auction of more blocks and to enhance production of minerals, more exploration is required to be conducted. Mining operations can be undertaken in an area only after the existence of mineral is established in the said area. Necessary forest clearance would anyway be taken before start of mining operations,” the mines ministry note said.

    The mines ministry is also proposing to allow captive miners to allow selling of 50% of their annual production without any restriction. Brought in through MMDR Amendment 2021, the government had allowed captive miners to sell up to 50% of the annual production “after meeting the requirement of linked plant.”

    The condition attached is being interpreted as if the sale would be allowed only after the requirement of the end-use plant is fulfilled.

    “Also, in cases where the linked end-use plant is not ready or is shut down due to some reasons for a short period, such as maintenance or if there is a fall in demand of the end product, the miner cannot continue the production and sale of minerals. Thus, the objective of ensuring optimal mining of mineral resources and facilitating increase in production and supply of minerals get defeated,” the mines ministry argued for choosing to omit the conditionality and end with the ambiguity.

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