Context

Lok Sabha passes the bill to amend the Mines and Mineral (Development and Regulation) Act.

About

• The bill is to streamline the renewal of the auction process for minerals and coal mining rights.

Major Amendments

• Removal of restriction on end-use of minerals: The Act empowers the central government to reserve any to be leased through an auction for a particular end-use. Such mines are known as captive mines. The Bill provides that no mine will be reserved for particular end-use.
• Sale of minerals by captive mines: The Bill provides that captive mines may sell up to 50% of their annual mineral production in the open market after meeting their own needs.   The central government may increase this threshold through a notification.
• Auction by the central government in certain cases: Under the Act, states conduct the auction of mineral concessions. Mineral concessions include mining lease and prospecting license-cum-mining lease. The Bill empowers the central government to specify a period for completion of the auction process in consultation with the state government.
• Transfer of statutory clearances: The Bill replaces the provision to require or obtain fresh clearances within two years and instead provides that transferred statutory clearances will be valid throughout the lease period of the new lessee.
• Allocation of mines with expired leases: The Bill adds that, whose lease has expired, may be allocated to a government company in certain cases. The state government may grant a lease for such a mine to a government company for a period of up to 10 years or until the selection of a new lessee, whichever is earlier.
• Extension of leases to government companies: The Bill provides that the period of mining leases of government companies may be extended on payment of additional amount prescribed in the Bill.
• Non-exclusive reconnaissance permit: The Act provides for a non-exclusive reconnaissance permit. Reconnaissance means preliminary prospecting of a mineral through certain surveys. The Bill removes the provision for this permit.

Conditions for lapse of mining lease

The Act provides that a mining lease will lapse if the lessee:

• Is not able to start mining operations within two years of the grant of a lease, or
• Has discontinued mining operations for two years.

However, the lease will not lapse at the end of this period if a concession is provided by the state government upon an application by the lessee.

Significance of the amendment

• It would lead to greater transparency in the auction process.
• High level of flexibility would help in maximizing the output of the mines.
• It will speed up the process of implementation of projects.
• It will create an efficient energy market.
• It will bring more competition as well as reduce coal imports.
• India will benefit from the high level of technology that would be gained for underground mining which is used by different countries.