Proposal to end iron ore leases of “no-output” mines

The Ministry of Mines (MoM) has proposed to terminate the iron ore leases of those working mines that have not started production even after a lapse of 7-8 months of auction and have not maintained minimum dispatch for three consecutive quarters. The ministry proposed to do so through the amendment of certain mining rules and has invited comments from the stakeholders on the same.

The mines ministry said it has prepared the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession (Amendment) Rules, 2021, seeking to amend the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016.

It added that the draft amendment rules had been made available as part of the pre-legislative consultation policy. Comments and suggestions have been invited from the mining industry, the general public, governments of states and union territories, stakeholders, industry associations, and other persons and entities concerned about the draft amendment rules.

Several successful bidders of such working mines whose previous mining leases expired in March 2020 have not started production even after a lapse of 7-8 months of auction and execution of mining leases in their favour.

Further, many successful bidders who have started production have not maintained the production and dispatch quantity up to the level required under Rule 12A of the Mineral Concession Rules (MCR), the ministry said.

The ministry said that it has been proposed to strengthen the norms of minimum production and dispatch through amendment of Rule 12A of the MCR Rules, 1960, to ensure sustained supply of minerals in the market in the future.

It added that the Rule 12A has been proposed to be amended to mandate a successful bidder to make a payment equivalent to the revenue share and other statutory levies that would have been payable at the prescribed level of minimum production/dispatch targets quarterly.

The ministry said termination of leases has also been proposed to be provided in the rules in case of failure to maintain prescribed production level for three consecutive quarters.

The decline in production and dispatch of important minerals such as iron ore not only leads to a spike in its market prices but adversely affects the manufacturing of iron and steel in the country too.

Also read: Amendments to mining laws get cabinet nod

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