By Our Correspondent
NEW DELHI/BHUBANESWAR/JODA/KOIRA: The Ministry of Mines is contemplating to delete the 10A (2b and 2c) Sections from the Mines and Minerals Development Regulation (MMDR) Act. Section 10A (2) (b) allowed an entity to acquire a mining lease for the mines allotted prior to auction regime without any sunset clause and 10A (2) (c) allowed an entity to get the environment and forest clearance within 2 years of the auction of mines, highly placed sources in Union Mines Ministry said.
Under these 2 provisions of MMDR Act, about 600 mines are stuck and the idea is to get these mines for auction. The ministry also intends to return mines held with PSUs for more than 3 years where mining is yet to begin and other non-operational mines to the state government for auction.
In a bold move, the Mines ministry is mulling over removal of the definition of captive and non-captive mines, it has suggested bringing in early termination of captive leases from 2030 to 2025 and auction such mines without any first right of refusal.Another bold move that is being considered is that of transferring mines seamlessly whether it has been auctioned or allotted by the government.Under the current norms, only auctioned mines can be transferred and for non-captive mines, a transfer charge is levied equivalent to 80 percent royalty.
The tax burden has been at a higher range in India for mining, the ministry intends to simplify royalty calculation and plans to bring an amendment to the Act. The amendment will allow calculation of royalty which will exclude taxes and levies.
Discussion is also being held with the finance ministry on levy of the stamp duty in a calibrated manner instead of the entire lease period of 50 years at one go. All levies and royalty are calculated on the average sale price which ministry believes, is not the actual representative of actual mineral price and hence it plans to bring a national mineral index.
There is a proposal is to define illegal mining under the MMDR Act. In the past, like in the case of Coal India, violation of environment/forest clearance has led to the state government of Odisha seek fine in the tune of Rs 20,000 crore in 2017. The amendment will clarify that mining within the mining lease area cannot be illegal under Section 21 (5) of the MMDR Act.
Some thrust is also on the aluminum industry, where the ministry is of the opinion assured availability of bauxite and coal will lead to cost competitiveness and import substitution. It has suggested the ministry of coal should delegate the power of auction to the state governments similarly like mineral auctions.
In the coal sector, the ministry has already enabled the provision for auction of coal mines for commercial sale but final rules for the auction are yet to be formulated as COVID-19 delayed the beginning of the auction process starting April 2020. The ministry is also looking at including a revenue-sharing model for auction of coal to boost production, enable single-window clearances, and reduce dependence on imported coal.
The focus of the government is to bring big reforms in the coal and mining sector to kickstart the economy which has been majorly impacted due to a long spell of lockdown on account of coronavirus spread.
Prime Minister Narendra Modi has also discussed ways to boost growth in the coal & mining sector with Pralhad Joshi and officials of the respective ministries. The major topics discussed were on bringing changes in the auction structure, greater participation from the private sector by way of reducing the cost of mining, ease of doing business leading to an increase in coal and mineral production.
Sources said that Ministry of Mines is looking at doubling employment from the current one crore to two crore and even double GDP contribution from Rs 4.1 lakh crore to Rs 8 lakh crore by 2024. The ministry has mooted for pre-embedded clearances for successful bidders as it requires 20 statutory clearances which take 2-3 years to obtain. The proposal is for the states to obtain clearances prior to the auction which will be transferred to the winning bidder. The ministry is already monitoring pilot projects in four states where mines are auctioned with pre-embedded clearances.
