An enormous push to the commercial mining sector is on the anvil with the government planning to introduce a slew of reforms to push the growth of the mining sector by drawing investors and improving mineral production in the country. Recently, Union Minister Pralhad Joshi had announced the usage of almost ₹ 1,500 crore lying in exploration trust for accelerating the country’s mineral output by 200 per cent in the coming seven years.
With other measures like Mines and Minerals (Development and Regulation) Amendment Act 2015, that introduced transparent and competitive auction process for grant of mineral concessions besides setting up of National Mineral Exploration Trust (NMET) to accelerate mineral exploration activity, reforms in the sector are gaining prominence.
“Mining sector has a pivotal role to play in the ‘Make in India’ vision of the Prime Minister. Growth of economy is dependent on uninterrupted supply of minerals, which form the basic raw materials for industry... The Government aims to increase mineral production (in value terms) by 200 per cent in 7 years,” the Minister had said during National Geoscience Award 2018.
Previously, National Mineral Policy 2019 had been unveiled to boost the mining sector that proposes to attract private investment through various incentives like financial package, right of first refusal at the time of auction etc. Industry experts have also cited their concern with the fact that since the search for the near surface deposits have reached a point of saturation, finding deep seated and concealed mineral resources by applying state-of-the-art technologies is another challenge staring at the nation.
Also, in another move recently, the Centre amended mining rules ensuring extension of mining leases by state government of mineral blocks that are held by public sector undertaking (PSU) companies. According to government information, “the Ministry of Mines has amended the Minerals (Mining) by Government Companies Rules, 2015. It has substituted “may, for reasons to be recorded” in rule 3, in sub-rule (2) and rule 4, in sub-rule (3) with “shall, for reasons to be recorded”, stated an official statement.
The amendment implies that all mining leases granted to government companies shall be extended by the state government for up to twenty years at a time. The extension will have to be granted by the state if an application is made by the Government Company or corporation at least twelve months prior to the expiry of the mining lease, the statement said.
Steel Minister Dharmendra Pradhan stated that this measure is an integral step towards ensuring raw material security for Indian steel sector. “It will also ensure price stabilization of raw materials, and will have positive effect on the secondary steel sector,” shared the Minister.
As per provision of Section 8A(6) of Mines and Minerals (Development & Regulation) Act, 1957 (in short, MMDR Act, 1957), the lease of 31 working mines of iron ore are expiring on March 31, 2020. However, this amendment fails to provide relief to private sector miners seeking an extension to mining leases expiring in March 2020.
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