Over 500 non-coal mineral blocks, partially or minimally explored below existing leases, but are entangled in legacy concerns and litigation, will be up for grabs as the Cabinet is learnt to have authorized a proposal to amend the relevant law for their re-allocations by way of competitive bidding. Also, the employment-intensive, but extremely below-invested sector, will get a fillip from a Cabinet selection to do away with finish-use restrictions for miners. Those with captive leases will be permitted to sell the minerals in the open marketplace.
Sources stated the Cabinet also gave the go-ahead for reallocation of many non-generating blocks of the state-run organizations, a move that could also enthuse the private players as lots of of these blocks have abundant confirmed sources.
The moves are in sync with the National Mineral Policy, which aims to enhance the domestic production of non-coal, non-fuel minerals by 200% in seven years with a higher private sector participation.
The leases stuck in disputes and legacy concerns have failed to start off production even right after a 5-year window supplied below the Mines and Minerals (Development and Regulation) Act in 2015. The rescinding of the relevant sections of the Act will bring these leases back in the hands of state for prompt reallocation, the sources stated. The existing holders of these leases will be compensated for exploration expenditure incurred by them, by dipping into the funds below the National Mineral Exploration Trust (NMET).
Mineral-prospective locations will be place to auction providing seamless prospecting licence-cum-mining-leases and this will add to certainty of tenure and will come in handy for prospective investors with deep pockets and appetite for extended-gestation projects.
“These amendments will make a large number of mines available for auctions. It will help us strengthen the ‘auction-only’ regime and boost transparency in the system,” an official supply stated.
The investor-friendly measures are taken as element of the Atmanirbhar Bharat scheme for the mining sector announced by finance minister Nirmala Sitharaman in May final year.
While the distinction amongst captive and non-captive mines will be removed, captive miners will probably augment production for sale in the open marketplace, boosting supplies in the nation. This also signifies that the preference to ‘captive’ customers will go and, alternatively, all mines will be offered for any person which includes industrial miners. Captive mines will be permitted to sell up to 50% of the minerals excavated.
The sources added that as in the coal sector, it is proposed to provide 50% rebate in the quoted income share for non-coal mineral lease holders, for the quantity of mineral developed and dispatched earlier than scheduled date of production. Further, the cabinet has also cleared the extended-pending demand of the market for waiver of charges for transferring mineral concessions for non-auctioned captive mines.
Given that hefty levies are generating India’s mineral sector globally uncompetitive – the successful tax price (ETR) on mining in India is about 64% which is highest in the planet exactly where in other mineral-wealthy nations it ranges amongst 34-38 % – , the government has also proposed to bring in essential amendments to the Indian Stamp Act, 1989, to bring in uniformity across states in calculation of stamp duty. However, it remains to be noticed if these will be duly complied with by states, as royalty from minerals and stamp duties on these products are massive income sources for mineral-wealthy states.
The cabinet has also authorized introduction of an index-primarily based mechanism by building a National Mineral Index (NMI) for a variety of statutory payments and other folks for future auctions. At present, the typical sale price tag (ASP) is the basis for calculation of a variety of statutory payments, which is topic to distortions due to absence of sale price tag information for some minerals, variations in costs across states, and so on. A committee will be constituted to examine the situation, the sources added.