Odisha mulls relaxation in mining lease holding norms under rule 37

With as many as 10 mining lease holders
have been found to be  operating their
mines through a third party, the Odisha government is considering to make some
amendments in the section 37 of the Mineral Concession Rules, 1960, which has
strictly restricted the mining operation to the lease holders only.

“We
are examining the rule and after getting the inputs from the Law department
we’ll send our views to the central government” said Mr Deepak Mohanty,
Director of Mines.

The rule 37 of the MCR 1960 says, “The lessee
shall not, without the previous consent in writing of the State and Central
Government assign, sublet, mortgage, or in any other manner, transfer the
mining lease, or any right, title or interest therein, or enter into or make
any [bonafide] arrangement, contract, or understanding whereby the lessee will
or may be directly or indirectly financed to a substantial extent by, or under
which the lessee's operations or undertakings will or may be substantially
controlled by, any person or body of persons other than the lessee.”

Mr Mohanty added that under the current law if a
lessee gets a ‘substantial’ investment from a third party, it is a violation of
government order. Now, the central government wants to bring more clarity on
the word ‘substantial’ and has asked for states’ views.

The state government has found that as many as
10 lessees have transferred their mining operations to other parties. On Thursday
the Justice M.B.Shah Commission grilled the officials of Sharda mines and Jindal
Steel and Power on their supply arrangement. Sharda mines have allegedly transferred
its mines to JSPL. Similarly, Thriveni Earthmovers has been excavating minerals
like iron ore, manganese, in the Joda, Barbil and Koira area on behalf of the
original lease holders. After getting these allegations the Odisha government
had set up and investigating team in 2008 and found as many as 10 such cases
and subsequently issued show cause notices.

Now, when the Shah commission is focusing on
these violations,  the state is
considering to relax the rule to allow third parties to invest up to 50 % along
with the lease holder.

Edited by Tapan Moharana