The tussle between steel companies and merchant iron ore miners is hotting up as the September 3 deadline of the Centre seeking the opinion of the State governments, mining body and industry on amending the Mines and Minerals Development Regulation (MMDR) Act to put about 500 mines on e-auction, nears.

As part of the ‘Atmanirbhar Bharat’ programme, the government has proposed to enhance private investments in the mineral sector by bringing in fresh reforms.

Minerals is one of the highest employment-generating sectors. It has deep and wide impact on upstream and downstream sectors such as mining machinery, steel, aluminium, commercial vehicles, rail transportation , ports, shipping and power generation.

The amendment will resolve legacy issues and move towards an auction only regime for allocation of mineral resources.

Though the government had extinguished Section 10A (2) (c) of the MMDR Act in January, 2017, in the absence of a specific sunset clause in the Act, cases are still being filed.

However, Section 7 of the MMDR Act, amended in January, 2015 provided a maximum five-year for completing the prospecting of the mine that was allotted by State governments under its discretion. The maximum time-frame for prospecting also lapsed in January this year.

Transparent auction

Hence, the government has now proposed an Amendment Bill to reallocate mineral blocks through transparent auction.

The government has also proposed to appoint an authority to decide the value of expenditure on exploration in legacy cases and reimburse the same from funds in National Mineral Exploration Trust.

However, most merchant miners that have received the concession on mines by allotment from the State government are against the amendment and auctioning of mines.

Bhaskar Chatterjee, Secretary General, Indian Steel Association, said the revenue generated by opening up of mines is estimated to be about $250 billion, including $80 billion as direct and $170 billion as indirect contribution, as per the Ministry of Mines.

The State exchequer can earn about ₹40-lakh crore through contribution to NMET, District Mineral Fund and other indirect levies through transparent auction of mines by repealing Section 10A2 (b) of MMDR Act, he said. Since 2015, the government has auctioned 97 mining leases.

Voicing concern against repelling the controversial Section of MMDR Act, the Federation of Indian Mineral Industries, in a letter to the government recently, said if the existing concessionaires are allowed to covert their RP (reconnaissance permit) to PL (prospecting licence) and PL to ML (mining licence), an additional job creation can happen through the 179 PL and 393 ML.

RK Sharma, Secretary General, FIMI, said the association is in the process of getting the opinion of more members in this matter and will submit it to the government soon.

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