 "Law to sell captive mines sans auction gets nod")
The Cabinet on Thursday cleared an amendment to the recently enacted mining law to permit transfer of captive mines granted on discretion.
Some major deals among cement companies, such as of UltraTech, Reliance Cements and Lafarge, are stuck because the Mines and Minerals (Development and Regulation) Act of last year allows transfer of mining leases only for auctioned ones. The government will be soon introducing the proposed amendment in Parliament.
Auction of non-coal mines was introduced in the new law. Earlier, all non-coal mines were given out by state governments, on discretion. "The amendment will benefit lessees desirous of transferring the captive leases not granted through auction. It will also benefit banks and financial institutions. It does not entail any recurring or non-recurring expenditure on the government," the later stated.
Aditya Birla Group's UltraTech Cement is acquiring the 22.4 million tonne cement capacity of debt-ridden Jaiprakash Associates for Rs 17,000 crore.
The Anil Ambani-owned Reliance Infrastructure is selling its cement subsidiary to Birla Corp for Rs 4,800 crore. And, as a condition for its merger with Holcim, the Competition Commission of India had asked Lafarge to sell two units. The company was unable to sell its two units to Birla Corp because the mining rights could not be transferred. The amendment was proposed to "spur merger and acquisitions in the mining sector and help in checking the stressed and non-performing assets of banks, by allowing them to liquidate assets where a firm or its captive mining lease is mortgaged".
