Sale limit on minerals from end-use blocks may be lifted

Govt officials said any mineral extracted from a mine should not go waste

To promote zero-waste mining, the government is likely to relax the ceiling for sale of surplus minerals extracted from an end-use-linked block.

The Centre had earlier planned to allow sale of 10 per cent of the quantity extracted in the open market. A company that hold mining blocks linked to an end-use project cannot sell the entire quantity of extracted minerals. It can only use the minerals for its facility.

Government officials said any mineral extracted from a mine should not go waste. Therefore, the miner should be allowed to sell the mineral in the open market or even export it. “Even if we cannot use it, someone else (some other country) can if there is demand for the mineral. But if there is a ceiling on the sale volume, it would go waste,” a mines ministry official told this newspaper.

Amendments to the draft mineral auction rules propose the companies be granted relaxation to sell 10 per cent of the extracted mineral in the open market. Industry players have said this was insufficient to attract the private sector. The company concerned should have full discretion over the mine and its output, they said.

Analysts have said once the government auctions mines, it should let the mine owner decide what it intends to do with the output, as long as the end-use plant’s requirements are met.

Last month, the mines ministry invited suggestions on draft Mineral (Auction) (Amendment) Rules, 2017, seeking to amend the Mineral (Auction) Rules, 2015. The Ministry of Mines has also sought the views of various stakeholders on the proposed Bill to amend the Offshore Areas Mineral (Development and Regulation) Act, 2002, aimed at introducing transparent and effective mineral auction rules in offshore areas. This was being done to make mineral block auctions more effective and to attract more investors.

According to a former government official, “There should only be export restrictions on the company extracting minerals. The government should not decide how much a company should produce, what the company should use it for, or if it can sell the produce in the open market. As long as the mineral is being used in the country, there should be no restrictions.”

In March 2016, the government cleared a proposal to amend the Mines and Minerals (Development & Regulation) Act to include the provisions of allowing transfer of captive mines granted through procedures other than auction.