Aggrieved over hefty fees on transfer of leases, miners want waiver

Prior to formulation of the revised MMDR Act, the change in hands at mines happened seamlessly without any financial burden

Aggrieved over hefty transfer fees charged on change in ownership of mining leases, the miners have asked for a waiver.

Prior to the formulation of the revised Mines and Minerals-Development & Regulation (MMDR) Act 2015, the change in hands at mines happened seamlessly without any financial burden. But post its enactment; lessees have to shell out 80 per cent of royalty as fees for ownership transfer.

“Transfer of all the leases should therefore be permitted without any additional financial implications as was prevalent prior to enactment of MMDR Amendment Act, 2015. Mergers and acquisitions are the integral components of the business and corporate sector for bringing operational efficiency and strengthening economy,” mining body Federation of Indian Mineral Industries said in a recent presentation to Niti Aayog, the planning think-tank.

In the current MMDR regime, transfer of leases is applicable only to auctioned mines. Captive mines granted before the enforcement of MMDR Act on January 12 2015, are permitted to transfer ownership only after payment of 80 per cent of the royalty. But, transfers of existing non-captive leases other than the ones obtained by competitive bidding are not eligible for transfer of ownership.

Fimi has also pointed to the Niti Aayog on the anomaly in distribution of mining leases across the country. An area wise scrutiny of the mining leases shows 72 per cent of the leases of major minerals are confined to areas less than 50 hectares in size, marking a measly nine per cent of the total mining area. Also, there are myriad leases of minor minerals with area of up to five hectares only.

The mineral promotion body feels that majority of the awarded mines are too small to be sustainable or be valid cases for scientific mining. “It is suggested that, in the future, no fresh lease may be granted of less than 50 hectares size unless the deposit itself is small. Administration of so many small mines becomes difficult,” Fimi reasoned.