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Mines and Minerals Amendment Bill (20 March 2021)

Mines and Minerals Amendment Bill (20 March 2021)

Context:

  • The Lok Sabha cleared The Mines and Minerals (Development and Regulation) Amendment Bill, 2021. Passed by voice vote, the Bill is aimed at bringing more transparency in the auction process and also to boost employment in the sector.

Background:

  • The Mines and Minerals (Development and Regulation) Amendment Bill, 2021 amends the Mines and Minerals (Development and Regulation) Act, 1957, which regulates the mining sector in India.

Summary of the Debate

Key Highlights of the Mines and Minerals (Development and Regulation) Amendment Bill, 2021:

Removes distinction between captive and non-captive mines:

  • It is removing the distinction between captive and non-captive mines. So, now when mines get auctioned, they will not be attached to a specific purpose of a specific industries or a specific sector.

    • Currently, there are two kinds of mines:

      • Captive Mines: Mines which utilized for the specific purpose. Captive industries own these mines. The company cannot sell coal or mineral outside. For example, if there is still plant and then there is iron ore mine then only the still plant will be using that iron ore mine.

      • Non- Captive Mines: In Non-captive mines, the minerals obtained by a company can be sold in the market.

Removal of restriction:

  • The bill allows the Centre to reserve any mine (other than coal, lignite, and atomic minerals) to be leased through an auction for a particular end-use. For example, iron ore mine for a steel plant.

Sale of minerals by captive mines:

  • Earlier, the ore that used to come from Captive mines will only go to the captive industries. But under the recent amendment, the bill allowing the lease holders of captive mines to sale upto 50 percent of their ore in to the open market but whatever the ore they sell in the open market, they have to pay some amount of money to the government.

Transfer of statutory clearances:

  • The Bill replaces the provision to require or obtain fresh clearances within two years and instead provides that transferred statutory clearances will be valid throughout the lease period of the new lessee.

Extension of leases to government companies:

  • There is a provision in the bill which allow the government to allocate Mines (other than coal, lignite, and atomic minerals), whose lease has expired, to the government companies for a period of 10 years.

Auction by the central government in certain cases:

  • Under the Minerals (Development and Regulation) Act 1957, states conduct the auction of mineral concessions (other than coal, lignite, and atomic minerals). The Bill provides that if the State Government is not able to complete the auction process within a specified time, the Central Government may take over and conduct such an auction.

Centre’s direction to Mining Development Fund:

  • In every area, there is a mining development fund and the purpose of this fund is that the money should be spent for the benefit of that area. The bill says that the now central government can also direct that how the money will be spent.

National Mineral Exploration Trust (NMET):

  • To see the overall functioning of the mining sector, the Bill provides for the constitution of a Statutory body named the National Mineral Exploration Trust (NMET).

Significance of the Bill:

  • Less import: India imports a lot of raw materials and after Aatmnirbhar Bharat, government is trying to ensure that we don’t depend on import on any sector.

  • Metal industries: Many important industries including steel, copper, etc import lots of raw materials so that they can do value addition and then sale in the domestic market or export. Now, because of boom in mining production, there will be a lot of metal industries will come up.

  • Transparency: There will be greater transparency in the auction process.

  • Real estate sectors: Real estate sectors will also be get benefitted because there will be boost to steel, cement, etc.

  • Implementation: The process of implementation of projects will get boost.

  • Export hub: Over a period of time, the amount of foreign investment coming to India and amount of production happening in India will make India a major hub for supply to the whole world.

  • Employment: Effective and profitable mining will create local employment at an enormous level.

Way Forward:

  • Impact of mining should not spoil environment of a region and that issue should be focused by both the state government as well as central government in each area.

  • Government needs to develop adequate infrastructure in other sectors to create an adequate export capacity of Mines and minerals.

  • In the best interest of mining industries, every state should try to work in cooperation with the central government and make sure that mining is environment friendly, using new technology and using more and more investment.

  • There is need to reduce the losses associated with the value addition of minerals.

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