Coal news and updates

One year on, Centre to once again amend MMDR Act

Nearly a year after its passage, the government has decided to further amend the existing Mines and Minerals (Development and Regulation) Act by inserting a provision for allowing transfer of captive mining leases granted through a route other than auction.

The Ministry of Mines has prepared the draft Mines and Minerals (Development and Regulation) (Amendment) Bill, 2016 seeking to amend the Mines and Minerals (Development and Regulation) Act, 1957.

As part of the Pre-Legislative Consultation Policy, the draft Bill, along with an Explanatory Note explaining the provisions of the proposed draft Bill, have been made available on the website of the Ministry of Mines at www.mines.gov.in inviting comments/suggestions from the general public, governments of states and Union Territories, mining industry, stake holders, industry associations, and other persons and entities concerned.

The last date for receipt of the comments/suggestions is January 26, 2016.

The amendment will come in the form of addition of one paragraph after sub-section (6) in the section 12A of the Mines and Minerals (Development and Regulation) Act, 1957,

After the amendment, the Section will read as “Provided that where a mining lease has been granted otherwise than through auction and where mineral from such mining lease is being used for captive purpose, such mining lease will be permitted to be transferred subject to compliance with the terms and conditions as prescribed by the Central Government in this behalf.”

The new Act may be called the MMDR (Amendment) Act, 2016.

After the amendment, the transfer of captive mining leases, granted other than through auction, would facilitate banks and financial institutions to liquidate stressed assets where a company or its captive mining lease is mortgaged.

The transfer provisions will also allow mergers and acquisitions of companies and facilitate ease of doing business to improve profitability and decrease costs of the companies dependent on supply of the mineral ore from captive leases.

The transfer of captive leases would be subject to the consideration of enforcing performance security, mine development and production agreement (MDPA), and realisation of an appropriate amount, if any, if found feasible at the time of framing the terms and conditions.

Source: ICMW