India’s mines ministry has proposed a host of amendments to the mineral concession rules (MCRs) for minerals other than atomic and hydro carbon energy under which ownership transfer for all kinds of mining leases obtained either via auction or non-auction routes would be allowed. This is expected to encourage mergers and acquisitions in the sector.
Usually, it takes three to four years for a winning bidder to acquire the ownership of a mine after securing all clearances, including environment and forest nods; the new rules would mean that there won’t be any bar on transferring the ownership once it is vested.
The non-transferability of mining leases have been dampener for investors. In line with the MMDR Amendment Act, 2021, the draft Minerals (Other than atomic and hydro carbon energy mineral) concession (Fourth Amendment) Rules, 2021 allows transfer of mining lease in all cases whether auctioned/non-auctioned, captive/non-captive mines. The only rider is that such transfer will not result in change of the status of captive mines to merchant mines or vice-versa.
The Minerals (other than atomic and hydro carbon energy mineral) concession, 2016, which is now proposed to be amended, allowed transfer of mines granted through the auction route and the mines granted other than under auction route, but only those meant for captive purposes.
The government has also proposed to halve the simple interest rate, currently payable at 24% per annum, on delayed payment for various levies and fees including on rent, royalty and others.
The changes in the draft MCR, 2021, have been proposed to implement the amendments made in March this year to the Mines and Minerals (Development and Regulation) Amendment Act, 2021. The objective of the amendment was to increase employment and investment in the mining sector. It was also aimed at enhancing the pace of exploration and auction of mineral resources.