The Union Cabinet approved amending the Mines and Minerals (Development and Regulation) Act to allow transfer for captive mining leases issued prior to January 12, 2015, in case of mergers and acquisitions. The amendment now needs ratification from the Parliament.
The lack of provision for transfer for mining leases issued prior to January 12, 2015 in the MMDR Act 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 reworked deal where in UltraTech will acquire 22.4 million tonne 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 have 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 Parliament."
Earlier this week, Steel & Mines Minister Narendra Sigh Tomar said he is in favour of transfer of captive mining leases issued prior to January 12, 2015. He had added that the move will help in mergers and acquisitions of financially stressed companies holding such leases and enable the continuation of production from such mines.
The Budget Session of the Parliament which began on February 23 is to continue till May 13. However, there will be a recess between from March 17 till April 24 for Standing Committee Meetings.
Both Tomar and the Mines Secretary declined to comment whether the MMDR amendment will be cleared in the Budget Session.