In a big move towards providing an impetus to the mining sector in the country, the Government of India has promulgated an Ordinance on Monday, the 12th January, 2015 (MMDR Amendment Ordinance, 2015) under Article 123(1) of the Constitution. This amends certain provisions of MMDR Act, 1957.
The promulgation of Ordinance became necessary to address the emergent problems in the mining industry. In the last few years, the number of new Mining Leases granted in the country has fallen substantially. In addition, second and subsequent renewals have also been affected by Court judgements. As a result, the output in the mining sector has come down drastically, leading to import of minerals by users of those minerals. The salient provisions of the Ordinance are listed below.
Removal of discretion
Essentially, Government intended to remove discretion in grant of mineral concessions. All mineral concessions are granted by the respective State Governments.
They will continue to do so but all grant of mineral concessions would be through auctions, thereby bringing in greater transparency and removing of discretion. This should also mean that the Government will get an increased share from the mining sector.
Unlike in the 1957 Act, there would be no renewal of any mining concession. The tenure of the mineral concession have been increased from the existing 30 years to 50 years. Thereafter, the Mining Lease would be put up for auction (and not for renewal as in the earlier system).
Impetus to the mining sector
The mining industry has been aggrieved due to the second and subsequent renewals remaining pending. In fact, this has led to closure of large number of mines. The Ordinance addresses this issue also. Government has kept in mind that interest of Mining Lease holders should not be adversely affected.
Therefore, Sub-Section 5 and 6 of Section 8(a) of the Ordinance provides that the Mining Leases would be deemed to be extended from the date of their last renewal to 31st March, 2030 (in the captive miners) and till 31st March, 2020 (for the merchant miners) or till the completion of the renewal already granted, if any, whichever is later.
Thus, no Mining Lease holder is likely to be put into any disadvantaged condition. It is expected that this would immediately permit such closed mines to start their operations.
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