Miners get new lease of life in fresh norms

NEW DELHI: A mining lease that is not renewed or cancelled by a state government in the two years to its expiry may be extended for 20 years, benefitting companies that lose time and revenues due to states��� apathy.

The Centre will extend mineral lease agreements with companies for 20 years if states fail to grant them within 24 months prior to the expiry of the agreement, an official in the ministry of mines said on condition of anonymity.

���The proposal has been included as part of the amendments to the Mines and Minerals (Development & Regulations) Act, or the MMDR Act, that is expected to get Parliament���s approval during the winter session,��� he said.
Amendments to the MMDR Act are being carried out to operationalise the New Mineral Policy that has been announced by the government.

Such a change will benefit metal and mining companies such as SAIL, Tata Steel, Hindalco, Sterlite and Essel Mining whose licences will be up for renewal soon.

An absence of guidelines on lease extension has resulted in cancellation of some mining leases of SAIL in the famous Chiria mines region. The PSU is operating its iron ore mines in the region on deemed extension as a formal extension has not been granted by the Jharkhand government.

According to the proposal, a lease holder should apply for a renewal to the state government two years before the date of expiry of the lease. If the state government doesn���t act on the application till the expiry of the lease, it shall be deemed to have been extended for 20 years.

At present, an expired lease holder has to approach the state government every year for a renewal.

Another proposal seeks to shift a decision on a mining licence to the central government if the state government fails to act on it in 3-6 months, depending on the mineral category. Today, there is no time limit in which a state can send its recommendation to the Centre.

���The steel ministry has also favoured inclusion of this provision in its suggestions on changes in the MMDR Act given to the mining ministry,��� another government official said requesting anonymity.

The amendments are expected to prefer mining leases for companies that propose value addition. Existing steelmakers too would get preference when mining leases are granted to prevent delays hurting their operations.