By Our Correspondent
BENGALURU/NEW DELHI/BHUBANESWAR: The reported move of the Union Ministry of Mines to delete the 10A (2b and 2c) Sections from the Mines and Minerals Development Regulation (MMDR) Act, is likely to badly hit Gold Mining Operations and Explorations in India and particularly in Gold bearing Southern State of Karnataka, a Bengaluru based Gold Mines Owner said on Saturday.
Talking to www.indianewsdiary.com, over phone from Bengaluru, Sandeep Lakhwara ,MD, Deccan Gold Mines Pvt Ltd, said many exploration and mining companies like Deccan Gold Mines Ltd have relied on section 10 A2b to undertake exploration at a huge expense and make discoveries of gold deposit and apply for prospecting and mining licences. “We were requesting Prime Minister Narendra Modi and Union Mines, Coal and Parliamentary Affairs Minister Prahallad Joshi and well as the Karnataka State Government to not so hasty and give justice to us by granting Letter of Intent (LoP),” he said.
“Possible deletion of this clause will force these companies to take legal action against the government if the clause gets deleted. Mining blocks that could otherwise go into production immediately the applications are cleared under the existing 10 A2b clause could otherwise be blocked from being put up for auction or being otherwise developed for years. Deccan Gold has a ready to go into production mining block in Ganajur in Haveri district in Karnataka that was to go into production in 2019 but for the delays in the grant of licence,” Lakhwara ,MD, Deccan Gold Mines Pvt Ltd, said.
“It is still awaiting the grant notification letter from the State govt of Karnataka upon receipt of which the company is ready to swing into action to set up the processing facilities and go into production. Any mining reforms should fast track mining output and not result in the exact opposite which deletion of section 10 A2b shall cause,” he added. Like Lakhwara, 2 of his partners based out in Japan and Bangkok too expressed serious apprehension and huge loss.
“Gold mining is totally different from iron ore, bauxite, manganese and coal mining as it required longer time and we have already spent around Rs 100 crore in these fields in last 15 years hoping that we could carry on explorations and get Letter of Intent(LoP) but in view of the media reports regarding abolition of 10A (2b and 2c) Sections from the Mines and Minerals Development Regulation (MMDR) Act , we are now spending sleepless nights,” said one of Lakhwara’s business partner, who based out in Japan, over phone. It may be noted here that 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.
Another investor in Gold mining India’s Karnataka, from Bangkok, however also expressed his concerns on this issue. “Only big players can afford open bidding and we have been working since 15 years with permission from both Union and Karnataka Government and now they are all of sudden changing rules, which will otherwise create legal battle but nothing and it will badly hit Karnataka and Union Government’s exchequer, we like small miners and investors and local land holders,” he told over phone from Bangkok.
He said locals will be largely benefitted if explorations carried interrupted. “Once we got the Letter of Intent (LoP), we will start operations and explorations,” he added from Thailand’s Bangkok. He also added that the Government is considering to extend leases in Goa from 2007 to 2037 but for Karnataka, it is adopting different yardsticks.
“Rules are not fare and SMEs will be crushed and outside investors will not take any further risk in investing in gold mining in India if the Union Ministry of Mines goes ahead with its move to delete the 10A (2b and 2c) Sections from the Mines and Minerals Development Regulation (MMDR) Act,” he added.
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, which has sent shockwave among gold mine owners and investors.
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.
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.
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, sources added.
