Auction of mining leases not useful without proven reserves, says SGAT

Also says the ordinance has biased approach towards private players

Society of Geo-scientists and Allied Technologists (SGAT), a mining lobby body, has said that the introduction of prospecting license-cum-mining leases (PL-cum-ML) provision in the new mining ordinance is meaningless without assessment of mineral deposits. “Introduction of a new concession as PL-cum-ML does not serve any useful purpose. The existing system of PL and ML is good enough,” the body said in a statement.

Earlier, a potential mineral bearing area was first granted for the purpose of establishing mineral contents and to assess reserve in the form of PL. Then the licence holder was eligible to get a mining lease for the said area. In the mining ordinance, the new provision says henceforth, PL-cum-ML will be auctioned, which will be a two stage concession contained in one single approval. The area for PL-cum-ML will be identified by the state government.

SGAT said, the state government does not have the resources to assess the accurate proven reserve and hence, private players will not be interested to take part in the auction process in case of virgin mines.

“Private players will not be interested to put their money in a lease whose mineral deposit is unknown because it is nearly impossible to assess accurate mineral deposit without prospecting unlike coal,” said B K Mohanty, former director of geology and adviser to SGAT.

The ordinance mentions creation of a National Mineral Exploration Trust whose task will be to find out mineral reserves across the country. All existing miners and new lease holders will contribute two percent of their royalty payment to the Trust.

SGAT also said, the ordinance has biased approach towards private players.