It could end up turning into a right, royal mess for Goa if the amendment that the Central government proposes for the Mines and Minerals (Development and Regulation) Act 1957 becomes law. In the amendments proposed by the Union Ministry of Mines to the MMDR Act 1957 it states that under the Act States have the power to conduct auction of mineral concession and that across India mining leases in relation to 334 blocks expired on March 31, 2020. It further states that the Ministry has been seeking the with State governments the early auction of these blocks so that there is continuity in production of minerals. Yet, of the 334 block, just 28 have been auctioned.
The amendment proposes to provide the Central government with the powers to conduct the auction in cases where the State government faces challenges in conduct of the auction or fails to conduct it. However, the revenue from the blocks will accrue to the State and not to the Centre. The main reason for the Centre seeking to wrest this power is not to increase its revenue, but to ensure the continuous supply of minerals in the country as any delay in the auction will impact the availability as well as price of minerals.
This will affect Goa as of the 334 mining leases identified in the State, which would expire on March 31, 2020 not a single one has been auctioned. Of the 334, there are 184 non-working of which 60 come in the protected areas of wildlife sanctuaries and national park, within buffer zones and hence cannot be taken up for mining. There are therefore 124 mining leases can be taken up for mining and hence can be auctioned. Goa has not taken up the auction process for any of these, despite the Centre seeking an early auction and there also exisitng a Supreme Court ruling that directs Goa to auction its leases.
In its February 2018 judgement, when the Supreme Court set aside the second renewal of the mining leases granted by the State of Goa and mining activity came to a halt for a second time, the apex court had directed the government to ‘take all necessary steps to grant fresh mining leases in accordance with the provisions of the Mines and Minerals (Development and Regulation) Act, 1957’. What this essentially meant was auction of the mining leases in the State. Three years later the process for the auction has not even begun and mining operations still remain at a standstill in the State.
In December last, Chief Minister Dr Pramod Sawant had spoken of three options before the government for the restart of mining operations of which auction was one, the other two being an amendment to the Goa, Daman and Diu (Abolition and Declaration of Mining Leases) Act (Abolition Act), 1987 and forming a mining corporation that will bring mining under government control. The amendment to the Abolition Act would be the most difficult of the options, so the government had to choose from between auction of the leases and a corporation. Since auction was mandated by the MMDR Act, this should have been the obvious choice.
A reason why the government has chosen to delay the auction is that the local mining stakeholders are wary of the process as this could pass control of the mining leases into the hands of other business interests. Mining in Goa has been controlled by just a handful of entrepreneurs, some of them family run. The bidding process could bring in outside players that would tilt the balance away from those currently operating the leases. But, auction would also bring in a better deal for the government in terms of revenue as the lease would be bagged by the highest bidder. So, why the delay?
