New Delhi: The government of India which had last year come up with the MMDR (Amendment) Act has last week notified the Mineral Concession Rules 2016. In the new rule the government has simplified some earlier rules to attract more participation in the mineral auction and has given more powers to the state governments. In addition, the MCR 2016 will also allow clubbing of multiple leases together for implementing efficient and cost-effective mining practices.
One important amendment that has been incorporated in the new MCR is that now state government’s can grant transfer of mining leases. Previously, the state government could only grant transfer applications in minerals other than the minerals specified in part A & B of the first Schedule of the old act).
“The holder of a mining lease which has been granted only through auction may transfer his lease to any person eligible to hold a mining lease or prospecting license-cum-mining lease in accordance with the MMDR Act,” a gazette notification issued by the government on Friday night said.
The government’s move is an attempt to smoothen future high-value deals such as Aditya Birla Group’s acquisition of Jaiprakash Associates Ltd as such transfers (of mining lease) were previously not allowed.
Aditya Birla’s flagship Cement Company Ultratech Cement on 28th of February has announced the acquisition of the cement business of Jaiprkash Associates with 22.4 MTPA Capacity assets including the lime stone mines for Rs 16500 crore. After enactment of MCR the transfer of the mining leases will be smooth.
As per the new rules the non-mineral areas will also now be included in the mining areas by registering supplementary lease deeds. This will allow small mines (of less than 50 ha.) which have remained closed as they are geographically located in the non-mineral areas to be explored.
The notification of rules also empowers the state governments to terminate the mineral concession not granted through the auction route. However, the transfer of mineral concessions before MMDR Act, 2015 came into force shall not be liable for any action under the rule. The rules also call for payment of compensation to owner for surface rights.
Procedure to transfer mining lease
1. For transfer of mining lease by a lease holder who has granted the lease or prospecting license only after auction, to an eligible person who can hold a mining lease, prior approval of the state government is necessary
2. Before the transfer, both the transferor and transferee would have to submit an application to the state government. In the application the transferor would have to give details about the prospecting operation carried out in the mining block
3. The state government within 90 days of receiving the applications will convey its decision to approve or reject the transfer
4. However, if the state government does not convey its approval within 90 days of the application, it will be deemed that the state government has no objection to such transfer.
In the previous law, for transfer and sublease of a mining lease, both state government’s consent and central government’s approval ( in case of minerals specified in part A & B of the first Schedule of the act) were necessary.
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