Centre asks states to pick 5 new blocks with all clearances for auction

The Centre has asked each state having mineral resources to identify at least five new mining projects for auction with pre-embedded clearance on a pilot basis with a view to expediting the sale process as well as operationalisation of the blocks.

The Mines Ministry has released guidelines for the auction of mineral blocks with pre-embedded clearances as it explores ways to address the key issue of delay in mining production due to lack of various approvals such as forest and environment permissions.

The identified blocks would be auctioned along with other blocks without pre-embedded clearances.

Under the guidelines, the Centre has asked states to set up a project monitoring unit (PMU) to complete the preparatory work for obtaining requisite clearances, approvals and related work. The unit would obtain all the clearances for starting a mining project.

Finance Minister Nirmala Sitharaman last month had announced various structural reforms in the mining sector as part of the over Rs 20 lakh crore stimulus package to boost growth and job creation. She had announced the auction of 500 blocks and introduction of a seamless composite exploration-cum-mining-cum-production regime.

In the guidelines on the auction of mining blocks, the mines ministry said, "It has been decided that states should implement this mechanism on pilot basis in respect of identified mineral blocks, which could be auctioned with pre-embedded clearances...Each state should identify at least five mineral blocks for auction with pre-embedded clearance."

"These identified mineral blocks with pre-embedded clearances may be auctioned with the other mineral blocks without pre-embedded clearances. Based on the experience from the auction of the identified mineral blocks on pilot basis, further step will be taken towards mainstreaming the concept of auction with pre-embedded clearances of National Mineral Policy, 2019, approved by the Cabinet.

Stating that as many as 20 approvals, including environment clearance (EC) and forest clearance (FC), were to be obtained by the successful bidder before signing the mining leases which often lead to delays in starting of mineral production, the Centre asked states to set up a Project Monitoring Unit (PMU) to complete the preparatory work for obtaining requisite clearances, approvals and related work.

"The PMU will become the applicant for all the clearances required to start the mining operations," the mines ministry said.

So far, 95 mining leases have been allocated through auction since 2015, it said.

However, it has been observed that due to various processes involved, the time taken to operationalise the mines into production gets dragged on. The major challenge in this regard is to speed up the present procedural processes involved in obtaining statutory clearances from various authorities of the central and state governments by the successful bidder.

The mines ministry said that it examined the ways to speed up the time taken for obtaining clearances to ensure early production.

As a major policy intervention, the ministry has recently amended the MMDR Act 1957 through Mineral Laws Amendment Act 2020 wherein the valid rights and approvals of the previous lessee of brownfield mineral projects are facilitated to be transferred to the new lessee for a period of of two years.

During this period, the new lessee has to obtain all the clearances afresh. This is also a pre-embedded clearance mechanism for a limited period.

"To extend this facility also to greenfield projects with a wider scope, this ministry seeks to make provision for auction of mineral blocks with pre-embedded clearances. This will help to overcome the delays in operationalisation of mines into production after auction," it said.

"This will improve the business environment and improve mining sector contribution to the country's GDP and will bring greater participation of companies, ensuring better rates of auctions," it said.

Since Mining Plan is the basic document to start mining operation on which hinges the EC and FC, the PMU under the state government should get the Mining Plan prepared by engaging a qualified person, the ministry said.

"The PMU should approach the Indian Bureau of Mines for approval of such mining plan/scheme of mining. Indian Bureau of Mines will approve the mining plan submitted to them by the PMU within a period of 15 days, allowing successful bidder the flexibility to either enhance or reduce the production limit by 25 per cent, it said.

For environment clearance, "the PMU will complete the process and obtain the same along with FC stage-1""

Since obtaining land rights for mining is another time consuming process, the ministry said that PMU should get the land rights for mining in case of both government as well as privately-owned land.

The state government should also apply and obtain all other clearances which are required for the lessee to start the mining operations, the ministry said.

These clearances would be transferred to the successful bidder seamlessly so that mining operations start without any delay, said.