Parliament Passes Mineral Laws Amendment Bill, 2020 [Read Bill]

The Bill was cleared by the Lok Sabha on Friday, March 6, without any discussion. Today, the Rajya Sabha also discussed the Bill amidst scanty attendance and the members only appeared during voting, that too when Elamaram Kareem of CPI (M) pressed for division of votes.

The Bill removes end-user restriction on use of coal to allow personal consumption of coal and opens the sector for commercial mining by paving way for private and global players. With this objective, it amends the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) and the Coal Mines (Special Provisions) Act, 2015 (CMSP Act).

The Mineral Laws (Amendment) Ordinance, 2020, containing similar provisions was promulgated by the government on January 10, 2020. The same was due to lapse tonight, owing to which an urgent listing of the Bill was proposed by the government yesterday.

Parliamentary Debate

While introducing the Bill, Coal Minister Prahlad Joshi stressed on its importance as a measure to bring down import of coal.

"Whether should we, with FDI and privatization produce our own coal and supply it to our industries or we have to import by spending 2,71,000 crores? This is the question before the country today," he said.

Drawing attention towards the drawbacks of this move however, Amee Yajnik of Congress said that this will expose the country's natural resources to foreign markets, especially at a time when India has made a global commitment to promote Sustainable Development and to fight Climate Change.

She termed the provision enabling companies with 'no prior experience' to enter the coal mining business as a "dilution of eligibility criteria", which may pose serious consequences in the longer run and also asked the government as to how it planned on regulating personal consumption of coal.

Salient Features

Removal of restriction on end-use of coal: Presently, Currently, mining companies can use coal only for specified end-uses such as power generation and steel production. The Bill removes this restriction, allowing companies to carry on coal mining operation for personal consumption, sale or for any other purposes, as may be specified by the central government.

Eligibility for auction of coal and lignite blocks: The Bill clarifies that the companies need not possess any prior coal mining experience in India in order to participate in the auction of coal and lignite blocks. This enables 100% foreign direct investment in the sector through automatic route.

Composite license for prospecting and mining: Currently, separate licenses are provided for prospecting and mining, respectively. The Bill adds a composite license, called prospecting license-cum-mining lease to provide for both under one umbrella.

Advance action for auction: Under the MMDR Act, mining leases are auctioned on the expiry of the lease period. The Bill provides that state governments can take advance action for auction of a mining lease before its expiry.

Clearance & Licenses: The statement of objects and reasons annexed to the Bill further states that the Bill is aimed to expedite the allotment of mines, by easing the clearance process. It read,

"The mining leases in respect of 334 mines of iron ore, manganese ore and chromite are expiring on 31st March, 2020, out of which 46 are working non-captive mines. It has been observed that some of the States have initiated action to auction these blocks. However, the mines allocated through auction can start mining operations only after obtaining as many as twenty clearances from different Government agencies. This process is causing inordinate-delay in commencing of mining operations and subsequent production of the minerals…

To overcome the aforesaid difficulties in mining sector, it has become necessary to make certain amendments in the Mines and Minerals Act and the Coal Mines Act so as to facilitate seamless transfer of all valid rights, approvals, clearances, licenses and the like for a period of two years to a new lessee in case of minerals other than coal, lignite and atomic minerals."

In this backdrop, the government has allowed transfer of statutory clearances to new bidders. Currently, upon expiry of mining leases, statutory clearances also expire and the new lessee is required to obtain fresh clearances before starting mining operations.

The Bill provides that the various approvals, licenses, and clearances given to the previous lessee will be extended to the successor lessee for a period of two years, within which period he must obtain fresh licenses.

The Bill will now be placed for Presidential assent, before it becomes an Act.

[With Inputs From PRS Legislative]

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