FIMI pitches for extension of non-captive mines’ lease
   Date :27-May-2019

Business Bureau:
A mining industry body has pitched for immediate extension of leases of more than 300 non-captive mines until March 2030, expressing fear that the sector may face a crisis-like situation post expiry of licences of these mines next year. In a presentation before a high-level committee of Niti Aayog, the Federation of Indian Mineral Industries (FIMI) has said that the crisis situation in the mining industry developed following the amendment in the MMDR Act, 1957, in January 2015 that provided for auction as the sole mode of granting concessions for a fixed period of 50 years to private companies - captive and non-captive. NITI Aayog last month set up a high-level committee on mines, minerals and coal sectors to identify key challenges and negate their impact.
The committee has representation from private sector besides officials from steel, coal and mines ministries besides public sector mining companies. FIMI in the presentation to the Aayog noted, “Government companies - Centre or State - allowed extension of existing leases for a period of 20 years at a time beyond stipulated period of 50 years.” Fearing that this disparity will not only lead to a crisis-like situation and litigation, FIMI has demanded remedial measures.
“Till Amendment Act, 2015, there was no distinction between captive, non-captive and government companies. They were at par in all respects including tenure of leases. Mining - public or private, captive or non-captive - is one and should be taken as such in MMDR Act,” it has stressed. It cited examples of working mines in Jharkhand and Odisha that provide roughly 45 per cent of the iron / manganese requirements of the steel plants in the eastern sector. “There is an unsold stock-pile of 127 million tonnes of iron ore in these two states: Odisha and Jharkhand (85 million tonnes in Odisha and 42 million tonnes in Jharkhand). This ore is not required by the domestic steel plants nor can be exported because of the export duty of 30 per cent on +58 per cent Fe grade,” it said.
The representation said that it is also not possible for a prospective buyer to bid for unsold quantity not required in the domestic market or exported because of 30 per cent export duty. This will therefore lead to litigation and chaos and disruption of raw material supplies to steel plants, it said adding, many of the major steel plants in the country are fully dependent on the sourcing of raw materials from these non-captive mines. “It will therefore be very necessary to extend the period of existing non-captive leases till March 31, 2030 as is available for captive mines so that there is no disruption of raw material supplies. Thereafter, the lease period should be extended for 20 years at a time till reserves last,” it said. Of the 329 non-captive mines in Andhra Pradesh, Goa, Gujarat, Himachal Pradesh, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Odisha and Rajasthan, 101 mines can be auctioned, according to the mines ministry data.