In a bid to boost iron ore production, India’s Ministry of Steel has mooted a proposal to align terms and conditions of renewal of mining leases in the case of both commercial and captive mines, a government official said on Tuesday, September 27.
The official said that, to ensure long-term stability and planning, the Ministry of Steel has forwarded a proposal of its counterparts in the Ministry of Mines that terms and conditions for renewal of mining leases should be “aligned as much as possible” on expiry of current lease terms and times for renewals for both captive and commercial iron ore mines.
Citing an example, the official said that holders of mining leases for captive mines enjoyed the first right of refusal on expiry of existing lease agreements and renewal of the same through the auction route. But commercial miners, that is those operating mines which sell iron ore in the market, do not enjoy the right of first refusal on expiry of their current lease term.
It was pointed out that, as per the new Mines, Minerals Development and Regulation Act 2015, if commercial mines assigned mining leases prior to auctioning becoming mandatory have their existing mining leases expire in 2020 and the said mine will be put up for auction.
In the case of captive iron ore mines, it had been stipulated that their mining leases will expire in 2030 but the miner will have the first right of refusal before the same mine can be put up for auction.
Another issue flagged by the Ministry of Steel was whether all mandatory approvals in the case of an already operational mine will automatically pass on to a new mining lease holder after renewal through the auction route.
As things stand now, a new mining lease holder will need to apply for mandatory approvals afresh and the Ministry of Steel has concerns that delays in this process could lead to long interruptions in the production of operational iron ore mines, the official added.