Rule change by mines ministry likely to benefit state-run companies

The lease would then be extended for a further period of up to 20 years at a time

The recent notification of the central government which replaces the word “may” with “shall” on a key mining rule removes all ambiguity regarding renewal of operating leases allotted to state-owned entities.

The ministry of mines has amended the Minerals (Mining) by Government Companies Rules, 2015. In Rule 3, Sub-Rule 2, the phrase, “may, for the reasons to be recorded” has been changed to “shall, for the reasons to be recorded”.

This, in effect, makes it imperative for a state government to renew the mining lease for minerals of a government company, on an application made to it in this regard at least