Captive mines can now sell half their minerals in open market; govt removes end-use curbs to lure investments

The mines ministry has amended the mineral auction rules to remove end-use restrictions for mines to be allocated in future through the competitive bidding route, a move that is expected to enhance production and attract private investments into the sector.

“The state government shall not reserve any mine for captive purpose or any specific end use or partial specific end use in the auction,” the Mineral (Auction) Second Amendment Rules, 2021 that amends the Mineral (Auction) Rules, 2015, said. The first amendment to the 2015 rules was done in 2017.

The decision will cover minerals like iron ore, bauxite, limestone, lead, copper and precious metals.

The 2015 rules empowered the states to reserve a mine or mines for any particular specified end-use, but said that the minerals extracted under the mining lease shall be utilised solely for the specified end-use and not be sold or transferred or otherwise disposed of, either directly or indirectly.

In the new amendments, the mines ministry has said that in the cases of mines already auctioned as captive mines for any particular specified end-use before the commencement of the Mineral (Auction) Second Amendment Rules, 2021, up to 50% of the total mineral produced in such captive mine in a financial year may be sold in open market.

B K Bhatia, joint secretary general, Federation of Indian Mineral Industries (FIMI), said, “The removal of the concept of captive and non-captive mines and thereby, removal of restriction on end-use of a mine is welcome. Nowhere in the world, mines are allotted on the concept of captive and non-captive.”

The removal of distinction between captive and non-captive mines and their mandatory end-use criteria is likely to augment production for sale in the open market, boosting supplies in the country. This also means that the preference to ‘captive’ users will go and, instead, all mines will be available for anyone including commercial miners, analysts said.

Leave a Reply

Your email address will not be published. Required fields are marked *