The Cabinet is likely to consider and approve the mining sector reform proposals, announced in May last year by finance minister Nirmala Sitharaman as part of the Atmanirbhar package. Sitharaman had announced a series of reform proposals for the mining sector.
The reforms proposed to offer a comprehensive license as opposed to separate licenses for exploration and then for production. The second important proposal was to do away with the distinction between captive and non-captive mining. This will be a positive for firms with captive mines as they can now sell their output in the open market too boost revenues as well as augment supplies in the country.
This also means that the old policy of giving preference to ‘captive’ users will not be valid anymore. Instead, all mines will be available for anyone, including commercial miners.
The finance minister had also announced the concept of joint auctioning of bauxite and coal mines for the aluminium sector.
Among the proposals, another important one was on amending the contentious provisions to pave the way for auctioning of around 500 potential leases blocked in legacy issues now.
There was also a proposal to develop a comprehensive and broad-based mineral index for determination of levies and taxes on the lines of recently launched National Coal Index. A committee will be set up to develop the National Mineral Index in which representatives of the state government will also be inducted. The National Mineral Index will determine the value of the mineral that will form the basis for calculation of royalty and other such levies of selected minerals.
The mines ministry also proposed to seek amendment the relevant provision of the Act and rules to make National Mineral Exploration Trust functioning fully as an autonomous body. It also sought to amend rules to clarify the definition of illegal mining. At present, there is no distinction between illegal mining done outside the leasehold area and mining done in violation of various clearances and approvals inside a mining lease area.