Today, a crucial meeting on mining ordinance is scheduled between mines ministry and states. It is anticipated that Odisha & Karnataka may oppose the move.
A crucial meeting on the MMDR (amendment) ordinance 2015, convened by the mines ministry to hear concerns raised by mineral bearing states, is scheduled to hold today. The meting will be chaired by union mines minister, Narendra Singh Tomar. At the same time, the panel formed by the ministry to constitute rules for Ordinance is slated to sit on 22 Jan, 2015. It is expected that some mineral bearing states like Odisha & Karnataka will strongly oppose Ordinance in the meeting.
“We’ll oppose Ordinance in the meeting as it’ll squeeze powers of the states and state like Odisha will lose significant mining revenue”, Odisha Mines Minister, Prafulla Mallick said yesterday before leaving for New Delhi to attend the meeting.
Why Odisha opposing?
An in-depth study of Ordinance reveals that the state government’s powers are squeezed. While, Centre will decide everything including modalities of the auction to be made by the state governments. Though, Ordinance has highlighted certain benefits to the state, Centre has absolute power to override the state’s powers. Sample this one – Section 20 of the ordinance clearly says, “Notwithstanding anything contained in this Act, the central government may issue such directions to the state governments as may be required for conservation of mineral resources, or on any policy matter in the national interest, and for the scientific and sustainable development and exploration and exploitation of mineral resources.”
This Section 20 is enough to curtail the state governments’ powers. Centre as per its wishes can dictate terms under the excuse of national interest and conservation of minerals, said an expert in mining industry adding that the power of making first recommendation for prospecting license is totally gone as Ordinance has provision of leasing out mines for 50 years.
“Unlike in 1957 Act, there would be no renewal of any mining concession. The tenure of mineral concession have been increased from existing 30 years to 50 years. Therefore, mining lease would be put up for auction (and not for renewal as in the earlier system)”, a PIB release said.
Odisha government, which was planning to go for auction of 18 mines pending for second and subsequent renewal, now cannot do that as Ordinance has extended their life for 5 years in merchant mining and 15 years for captive users.
The state government had decided to immediately go for auction of 18 Iron ore and Manganese mines waiting for second and subsequent renewal, after obtaining permission from the Supreme Court. That will not be possible now after Ordinance. Secondly, the High Court order also prohibits the state government from doing so. Therefore, the state will lose thousands of crores instead of getting hefty amount.
While sending the state’s interest to the back bench, Ordinance keeps in mind the interest of mining lease holders in Sub-sections 5 and 6 of Section 8(a) and provides that mining leases would be deemed to be extended from the date of their last renewal to 31 Mar, 2030 (in captive miners), and till 31 Mar, 2020 (for merchant miners) or till completion of the renewal already granted, if any whichever is later.
“Thus, no mining lease holder is likely to be put into any disadvantaged condition. It is expected that this would immediately permit such closed mines to start their operation”, Government of India sources said.
Interestingly, the state government’s recommendations in the name of certain companies like POSCO-India would now become ineligible in view of Ordinance.
“All applications received prior to date of commencement of the Mines and Minerals (Development and Regulation) Amendment Ordinance, 2015 shall become ineligible”, section 10 of the ordinance said.
The Odisha government, on its Cabinet resolution, however, had decided that its recommendation made earlier would remain effective and such mines would not be part of the auction.
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