Govt mulls competitive bidding for allocation of mining leases

Aimed at improving transparency in allocation of mineral resources, government seeks to amend the existing 57-year old Act to introduce competitive bidding through the auction route for iron ore and other minerals.
"In order to both improve transparency in allocation as well as to ensure a fair share of the value of minerals for the government, the Bill prescribes competitive bidding by auction as the method to be followed for allocation of Mining Leases (MLs) in respect of notified minerals," said a draft copy of the Bill posted in Mines Ministry's website.
Seeking comments from almost all stakeholders, the Ministry in the proposed Mines and Minerals (Development and Regulation) (Amendment) Bill, 2014, said the route has been proposed to be taken in line with recommendations of the Hoda Committee on National Mineral Policy.

The bill, if passed in the Parliament, would amend the 1957 Act in the same name.
"Bulk minerals such as iron ore, limestone, manganese, bauxite etc., which are proposed to be notified, will account for 85 per cent or more of the value of mineral production in India," the Mines Ministry said.
As far as non-notified minerals are concerned, the Bill seeks to grant a combined PL-cum-ML for these minerals through a competitive bidding process.

"The scheme envisages that the successful bidder will conduct the exploration and prospecting work at his own risk and cost. In case there is any find, he will have to abide by the bid conditions which could be in the form of a production share, or a payment linked to the royalty payable etc," it said.

Though mining is a state subject, the new Bill seeks to empower Centre to prescribe different Terms and Conditions for auctions of different types of minerals and their application to different states.
The new Bill, it said, will also have focus on attracting private investment and latest technology and eliminating delay in administration, so as to enable expeditious and optimum development of mineral resources of the country.
To empower states to tackle the nagging illegal mining issue, the proposed Bill has also a provision to enable State Governments to set up special courts for trial of offences under the Act, if felt necessary. Besides, it seeks to make the offence of illegal mining in respect of notified minerals a cognizable offence.

In order to earmark funds for benefit of persons affected by mining as also for the rebuilding of infrastructure in the mining affected areas, the Bill proposes to set up a District Mineral Foundation in every district affected by mining.
"This will be funded by an additional levy related to royalty, the rate of which will be prescribed by the Central Government," the Mines Ministry proposed.