In a move, possibly the first of its kind, the Governor of a mineral-rich state has questioned provisions of the proposed mining reforms Bill being drafted by the Centre.
Though Governors are usually considered to be political appointees, yet it has not deterred Chhattisgarh Governor Shekhar Dutt to seek the intervention of Prime Minister Manmohan Singh’s Office (PMO) in addressing the anomalies in the Mines and Minerals (Development and Regulation) Bill 2010 and their consequent corrections.
In a letter to the PMO, Dutt has questioned the wisdom of the mines ministry in suggesting granting of licence to first-in-time applicants as a general rule and ‘licence by competitive bidding’ as an exception.
Arguing that it should have been just the opposite — that is by resorting to competitive bidding — he said it should be the way as is being practiced for oil and gas exploration licencing and would likely be adopted for coal.
Dutt contended that restriction on states to issue notification on an area over which applications for grant of Prospecting Licence/ Large Area Prospecting Licence (PL/LAPL) were pending with the state, virtually renders the bidding option infructuous because mineral bearing areas were always covered by some pending direct application.
Chhattisgarh chief minister Raman Singh has already raised issues on the proposed legislation, saying it needed to accommodate more views of the states.
The Governor also pointed out that the law should allow the state government to notify for competitive bidding of any area. The bids received in pursuance of the notice inviting offers should be decided by applying a well-defined objective criteria based on parameters such as “proposed investment in mineral-based industry” or “revenue sharing” with the government along with clear projection of employment generation.
Dutt cited that as per the provision of the MMDR Bill, although states have been vested powers to allocate mineral properties through competitive bidding, “such bids cannot be resorted to if someone has applied seeking mineral concessions before the issuance of the notice for such bidding”.
In this case Section 22(4) would become applicable and the mineral property would have to be allotted to the first person expressing interest ahead of issuance of notification.
The Governor demanded that Section 13(1) should make it clear that once a notification has been issued, all pending direct applications for grant of PL/LAPL would lapse and such prior applicants would be free to submit their offers in pursuance of the notification.
He suggested that financial bid component of the competitive offers should provide not only for the recovery of value of the government efforts made in acquiring and managing the data but also to get consideration for the value on the property as well.
A senior mines ministry official said that the modified Bill allowed state governments to set a minimum floor price for competitive bids based on mineral data for a deposit.
In reference to Dutt’s queries, the official said the states have been rendered free to call for competitive bids as the Group of Ministers (GoM) headed by finance minister Pranab Mukherjee has decided that all pending applications on the commencement of the new Act would stand abated. This would allow the states to notify all or any specific area of its choice afresh, he added.
Ban on iron ore exports
Chhattisgarh, which holds about 20 percent of the country’s iron ore reserves, has urged the Prime Minister to impose a ban on its exports, saying it wanted the supplies for domestic use to boost jobs.
Chhattisgarh joins Orissa in seeking a ban on exports by state-run miners, a move that raises prospects of tightening supplies from the world’s third-largest iron ore exporter and firming global prices.
Karnataka already has a ban on exports from private firms which they are currently appealing at the Supreme Court.
Chhattisgarh Chief Minister said he was ‘strongly in favour of putting an immediate ban’ on iron ore exports from the state and had formally informed Prime Minister Manmohan Singh about this.
A ban on exports was one of Raman Singh’s election promises in 2003, but this is the first time he has formally sought a ban. State-run NMDC is the only iron ore miner in Chhattisgarh and any ban must come from the federal government.
India’s iron ore exports, about half of which head to neighbour China, have already taken a beating owing to the ban by southern state Karnataka introduced last July.
Though Governors are usually considered to be political appointees, yet it has not deterred Chhattisgarh Governor Shekhar Dutt to seek the intervention of Prime Minister Manmohan Singh’s Office (PMO) in addressing the anomalies in the Mines and Minerals (Development and Regulation) Bill 2010 and their consequent corrections.
In a letter to the PMO, Dutt has questioned the wisdom of the mines ministry in suggesting granting of licence to first-in-time applicants as a general rule and ‘licence by competitive bidding’ as an exception.
Arguing that it should have been just the opposite — that is by resorting to competitive bidding — he said it should be the way as is being practiced for oil and gas exploration licencing and would likely be adopted for coal.
Dutt contended that restriction on states to issue notification on an area over which applications for grant of Prospecting Licence/ Large Area Prospecting Licence (PL/LAPL) were pending with the state, virtually renders the bidding option infructuous because mineral bearing areas were always covered by some pending direct application.
Chhattisgarh chief minister Raman Singh has already raised issues on the proposed legislation, saying it needed to accommodate more views of the states.
The Governor also pointed out that the law should allow the state government to notify for competitive bidding of any area. The bids received in pursuance of the notice inviting offers should be decided by applying a well-defined objective criteria based on parameters such as “proposed investment in mineral-based industry” or “revenue sharing” with the government along with clear projection of employment generation.
Dutt cited that as per the provision of the MMDR Bill, although states have been vested powers to allocate mineral properties through competitive bidding, “such bids cannot be resorted to if someone has applied seeking mineral concessions before the issuance of the notice for such bidding”.
In this case Section 22(4) would become applicable and the mineral property would have to be allotted to the first person expressing interest ahead of issuance of notification.
The Governor demanded that Section 13(1) should make it clear that once a notification has been issued, all pending direct applications for grant of PL/LAPL would lapse and such prior applicants would be free to submit their offers in pursuance of the notification.
He suggested that financial bid component of the competitive offers should provide not only for the recovery of value of the government efforts made in acquiring and managing the data but also to get consideration for the value on the property as well.
A senior mines ministry official said that the modified Bill allowed state governments to set a minimum floor price for competitive bids based on mineral data for a deposit.
In reference to Dutt’s queries, the official said the states have been rendered free to call for competitive bids as the Group of Ministers (GoM) headed by finance minister Pranab Mukherjee has decided that all pending applications on the commencement of the new Act would stand abated. This would allow the states to notify all or any specific area of its choice afresh, he added.
First-of-its-kind intervention
- Governor suggests resorting to competitive bidding — the way as it is being practiced for oil and gas exploration licencing
- Urges that the law should allow the state governments to notify for competitive bidding of any area
- Says that as per the provision of the Bill, although states have been vested powers to allocate mineral properties through competitive bidding, such bids cannot be resorted to if someone has applied seeking mineral concessions before the issuance of the notice for such bidding
- Chhattisgarh Governor Shekhar Dutt has sought PM Manmohan Singh’s intervention in addressing ‘anomalies’ in the Mines and Minerals (Development and Regulation) Bill 2010 and their consequent correction.
Ban on iron ore exports
Chhattisgarh, which holds about 20 percent of the country’s iron ore reserves, has urged the Prime Minister to impose a ban on its exports, saying it wanted the supplies for domestic use to boost jobs.
Chhattisgarh joins Orissa in seeking a ban on exports by state-run miners, a move that raises prospects of tightening supplies from the world’s third-largest iron ore exporter and firming global prices.
Karnataka already has a ban on exports from private firms which they are currently appealing at the Supreme Court.
Chhattisgarh Chief Minister said he was ‘strongly in favour of putting an immediate ban’ on iron ore exports from the state and had formally informed Prime Minister Manmohan Singh about this.
A ban on exports was one of Raman Singh’s election promises in 2003, but this is the first time he has formally sought a ban. State-run NMDC is the only iron ore miner in Chhattisgarh and any ban must come from the federal government.
India’s iron ore exports, about half of which head to neighbour China, have already taken a beating owing to the ban by southern state Karnataka introduced last July.
Next Story
