On January 10, 2020 the Mineral Laws (Amendment) Ordinance, 2020 was promulgated by the Union Cabinet. The Ordinance amends the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) and the Coal Mines (Special Provisions) Act, 2015 (CMSP Act). It has introduced a host of reforms such as removal of end-use restrictions, advance action for auction of mining lease by state government, seamless transfer of valid rights/approvals/clearances to the new lessee for a period of two years.
Government’s decision to promulgate an Ordinance, addresses the niggling issues of the mining sector pertaining to transfer of clearances for the mining leases being auctioned for operations post their expiry on 31st March 2020. It also facilitates a competitive auction of coal blocks for commercial coal mining. While the industry was strongly advocating for this statutory intervention, the Government was exploring executive actions to affect the desired transition in case of the expiring mining leases. We are happy that this recourse to the statutory amendment route in time will ensure uninterrupted supply of raw material to end use sectors.
The minimum time period required to obtain these valid rights/approvals/clearances required to start mining operations, in the pre-amendment scenario used to vary from four to five years, delaying the commencement of mining operations by the new lessees. Such delays in commencing the mining operations by the new lessee have been one of the critical factors adversely affecting the mineral production in the country, which in turn impacts the production of important downstream industries like steel, cement, Aluminium, etc.
Mineral Laws (Amendment) Ordinance 2020 provides for a time period of 2 years to obtain requisite clearances which would help in ensuring the smooth transition of expiring mining leases and in meeting sustained supply of raw materials. Mining in India is a prerequisite for Make in India and thrust for mining sector is needed for meeting the target of US$ 5 trillion economy by 2025. We need to explore new deposits as well optimally mine to meet the need of current as well future generations.
The author is Co-Chair, FICCI Mining Committee and Chief Regulatory Affairs, Tata Steel.
