The Cabinet has given its nod for amending the Mines and Minerals (Development and Regulation) Act, to allow transfer of captive mining leases issued prior to January 12, 2015, in case of mergers and acquisitions. The amendment now needs ratification from Parliament.

The lack of provision for transfer for mining leases issued prior to January 12, 2015, in the MMDR Act has held up several big ticket mergers and acquisitions like Lafarge’s plan of selling two of its cement units to Birla Cement.

Jaypee Group had to call off a deal to sell two of its cement units in Madhya Pradesh to UltraTech Cement in Febuary. The two companies are now working on a re-worked deal, in which in UltraTech will acquire 22.4 million tonnes of Jaypee’s cement manufacturing capacity. After the enactment of the amended MMDR Act on January 12, 2015, all mining leases in the country could only be issued after a competitive bidding process. Under the amended Act, even in case of mergers and acquisitions, transfer of mineral leases was only allowed for those that had been auctioned. Mines Secretary Balvinder Kumar said on Thursday, “The fresh amendment will allow the pending mergers and acquisitions to go through. Mineral Concession Rules flowing from the amendment will be issued once the changes to the law are ratified by the Parliament.”

Earlier this week, Steel & Mines Minister Narendra Sigh Tomar said he was in favour of transfer of captive mining leases issued prior to January 12, 2015. He added that the move would help in mergers and acquisitions of financially-stressed companies holding such leases.

The Budget Session of Parliament, which began on February 23, will continue till May 13. However, there will be a recess from March 17 to April 24, for Standing Committee Meetings. Both Tomar and Kumar declined to comment on whether the MMDR amendment would be cleared in the ongoing Budget Session.

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