Significant disruption in raw material supply possible post expiry of mining leases in April 2020: CII report

Our Bureau New Delhi | Updated on December 27, 2019 Published on December 27, 2019

A significant supply disruption is possible in mineral availability because of the expiry of mining leases in April 2020 according to a report by the Confederation of Indian Industry (CII).

The report titled Towards a Globally Competitive Minerals and Mining Industry said, “A number of leases are due to expire in 2020. With the auction process for these mines still under consideration and given that the process from auctioning a mine to actually commencing operations is long, significant disruption in supply is possible.”

“It may be noted that the mining leases for another set of mines will expire in 2030...leases for 329 merchant mines are due to expire on 31 March 2020. Of these, 281 mines are on-working,” the report said.

Another disruption to the industry being assessed by the industry is pertaining to the transfer of environment clearance (EC) and forest clearance (FC) to the new lease-holder. “The Supreme Court has ruled that EC and FC granted earlier could be seamlessly transferred to the new lease holder; this would ensure continuity in operations. State governments, however, have been insisting on the new lease-holder acquiring fresh clearances. In effect, the transition from the existing to the new lease-holder is not seamless resulting in potential disruption of supply,” the report said.

The report recommends reviewing and auction of non-working mines (expiring in 2020) immediately. Auctioning non-working mines in clusters has also been suggested by the report. A cluster approach may need to be adopted for mines which are commercially unviable. Thereafter, auction the non-working mines immediately, the report said. Mandating seamless transfer of EC and FC clearances, if operating parameters are the same has also been recommended.

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Published on December 27, 2019
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