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The Union Cabinet is expected to soon take up the Ministry of Mines proposal to repeal a Section in the Mining and Minerals Development (Regulation) Act that protects miners’ right to own leases indefinitely without developing the mines.
The amendment will cancel leases of about 500 mines which will then be put under auction to facilitate the government’s ‘Atmanirbhar Bharat’ mission, said sources. The mines, which are largely held by Merchant Miners, have been lying idle for the last few decades.
Despite having huge reserves, Indian companies import huge quantity of raw material such as iron ore, bauxite, limestone and manganese ore.
The industry suggested the government insert a sunset clause for mandatory development of a mine within a certain period of time. However, that did not find favour with the Government as getting necessary statutory approvals itself is a time-consuming process. Following this, sources said the Ministry of Mines decided to repeal the Sections 10A2(b) of MMDR Act.
Creation of more jobs
The Federation of Indian Mineral Industries has opposed auctioning of the mines lying idle for decades, claiming that it will lead to job losses.
In contrary, Dr Bhaskar Chatterjee, Secretary General, Indian Steel Association, told BusinessLine that auctioning of the mine will lead to fresh investment and create more job opportunity in backward regions.
Most of the leases were allocated in 1990 and still no prospecting has been done as the lease owners do not want to invest in exploration, he added.
If auctioned, the mines will not only unlock one billion tonnes of mineral reserves but also add over ₹40 lakh crore to the exchequer and ₹5 lakh crore revenue to State governments.
As per the Mines Ministry Auction summary report, 97 mineral blocks have been auctioned since 2015, adding a revenue of ₹8 lakh crore to the State exchequer.
Large integrated steel producers such as JSW Steel, Tata Steel and ArcelorMittal have already started mining operations in many of the 48 mines auctioned so far and are investing over ₹10,000 crore to develop mining infrastructure.
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