The Rajya Sabha, where the ruling National Democratic Alliance (NDA) is in a minority, on March 20 passed the crucial The Coal Mines (Special Provisions) Bill, 2015 and Mines and Minerals (Development and Regulation) Amendment Bill, 2015, thus providing a boost to the government’s economic reform agenda. Passage of the bills is a significant boost for the NDA, which had earlier won approval from both Houses for the insurance bill, seeking to raise the foreign investment cap in insurance joint ventures to 49% from 26%. Apart from validating auction as the sole means of allocation of mineral blocks and thereby promising bolstered revenue streams to states, the two Bills also seek to reform the sectors with investor-friendly proposals. While the coal Bill contains an enabling provision to usher in commercial mining by the private sector, the Mining Bill allows auction of major minerals like iron ore, copper and bauxites to bring about transparency, and seeks to encourage exploration and production with 50-year lease terms and secure tenures, besides allowing transfer of leases and other rights.
While the industry welcomed passage of the coal Bill, its response to the MMDR Bill has been mixed. The Federation of Indian Mineral Industries (FIMI), for instance, contends the auction route might not be desirable in all cases as it could jack up costs. It said the existing captive and non-captive mines should be given a 15-year transition period (the Bill allows a 15-year reprieve from re-auction for captive mines and says the existing non-captive mines would be put to auction after five years). Private miners are also opposed to the proposal to give a special dispensation, circumventing auction, to PSUs, when it comes to grant of mining rights. The other changes proposed in the MMDR Bill are, however, investor-friendly. For instance, it proposes transfer of mining leases and other rights (like prospecting and reconnaissance licences) between firms. Also, procedures for granting concessions are proposed to be expedited.
The select panel on the MMDR Bill had opined that the miners’ contribution to the district development fund, meant for rehabilitation, be enhanced from a third of the royalty as is currently stipulated. This, they said, could be done even through the subordinate legislation and without changing the Act.
The select panel on MMDR Bill also wanted the government to consider at a “later stage” issues like impact of mining activities on the environment, rampant illegal mining, lack of proper and scientific mine closure, land acquisition and resettlement and capturing windfall profits for the welfare of local and tribal communities.
“The Committee, in view of limited ambit of amending Bill under its consideration, is of the opinion that these issues are of utmost significance that warrant serious consideration by the government… The (Mines) Ministry should consider these issues to be incorporated subsequently in the MMDR Act, 1957, at an appropriate stage,” it said.
While the industry welcomed passage of the coal Bill, its response to the MMDR Bill has been mixed. The Federation of Indian Mineral Industries (FIMI), for instance, contends the auction route might not be desirable in all cases as it could jack up costs. It said the existing captive and non-captive mines should be given a 15-year transition period (the Bill allows a 15-year reprieve from re-auction for captive mines and says the existing non-captive mines would be put to auction after five years). Private miners are also opposed to the proposal to give a special dispensation, circumventing auction, to PSUs, when it comes to grant of mining rights. The other changes proposed in the MMDR Bill are, however, investor-friendly. For instance, it proposes transfer of mining leases and other rights (like prospecting and reconnaissance licences) between firms. Also, procedures for granting concessions are proposed to be expedited.
The select panel on the MMDR Bill had opined that the miners’ contribution to the district development fund, meant for rehabilitation, be enhanced from a third of the royalty as is currently stipulated. This, they said, could be done even through the subordinate legislation and without changing the Act.
The select panel on MMDR Bill also wanted the government to consider at a “later stage” issues like impact of mining activities on the environment, rampant illegal mining, lack of proper and scientific mine closure, land acquisition and resettlement and capturing windfall profits for the welfare of local and tribal communities.
“The Committee, in view of limited ambit of amending Bill under its consideration, is of the opinion that these issues are of utmost significance that warrant serious consideration by the government… The (Mines) Ministry should consider these issues to be incorporated subsequently in the MMDR Act, 1957, at an appropriate stage,” it said.
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