Cabinet Approves Amendments To MMDR Act To Reform Mining Sector: Report

The cabinet has approved amendments to the MMDR Act, CNBC-TV18 reported quoting sources. It had previously said in a report that the cabinet was likely to discuss amendments to the Mines and Minerals (Development and Regulation) Act.

Under the Atmanirbhar Bharat declaration, the government proposed to auction over 500 mineral mines for which it proposed amendments to the MMDR Act to bring about the reform for the mining sector.

The cabinet approved most of the proposed amendments to the MMDR Bill 2021 in January, but the Ministry of Mines proposed supplementary provisions to the MMDR Bill in February. The draft bill would allow the selling of 50% of coal extracted from captive mines that were allotted prior to the commercial coal mining auction. Since the global energy transition is happening faster than predicted, the goal is to optimize coal consumption.

In addition, the government has  not seen as much enthusiasm in commercial coal auctions following the Supreme Court’s deallocation of coal blocks in 2015 due to irregularities in allocation, said the report by CNBC-TV18.

Provisions have also been made to enable captive miners to sell up to 50% of their excavation in a year in order to promote increased mineral output. Minerals such as bauxite, iron ore, chromite, limestone, and manganese would require captive miners to pay additional royalties to the states.

The proposal also included the fixation of additional sums for granting extensions to existing government mining leases in order to reduce mining operations delays.

NMDC’s Donimalai iron ore mines in Karnataka were previously closed due to expiry, and the central government had to intervene and negotiate with the state government to allow operations after after increasing royalty from the company.  In the case of iron ore, 1.5 times the current royalty would be charged, and an equal sum for other minerals, if a government company’s expired mining lease is extended.

In the event that state governments face difficulties, the central government has suggested allowing itself to hold mineral mine auctions.

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