Mining ordinance brings in a shocker for Goa leases

TEAM HERALD

PANJIM: The Mines and Minerals Development and Regulation (MMDR) amendment Ordinance 2014 has a shocker for Goa as it states that iron ore leases renewed prior to the ordinance’s commencement will be valid for just five years. At the end of the five year period, the leases will be auctioned. This is a major blow to the State and the mining industry as in the last one month 31 lease deeds were signed for a period of 20 years each.

The ordinance, promulgated by the President Pranab Mukherjee, also paves the way for auction of new iron ore and other mineral leases, which could be granted for a period not less than 50 years. Also, leases renewed post commencement of the ordinance, would be granted for a maximum period of 30 years and minimum period of 20 years. This is likely to have an impact on 64 iron ore leases, which were operational in the State prior to their suspension in September, 2012 and have not yet been renewed.

A copy of the ordinance, which is in possession of Herald, states, “The mining leases which are operating under first or subsequent renewals as on the date of the commencement of the said ordinance, and where all the terms and conditions of the lease have been complied with, shall be allowed to operate from the date of commencement of the said ordinance till the period of completion of the tenure or till a period of fifteen years in case the lease has been granted on captive use condition and five years if otherwise, as the case may be.”

“On the expiry of lease period, the lease shall be put up for auction as per the procedure specified in this Act,” the amendments said. This will have direct impact on 31 leases, whose deeds have been signed for second renewal and the stamp duty has been collected for a period of 20 years.

At the same time, the amendments state that those leases, wherein the applications are made in a time bound manner, but prior to commencement of the ordinance, would be granted renewals only for a period of five years.

In case of fresh mining leases, the ordinance states that ‘for the purpose of granting mining lease, State government shall select through auction by a method of competitive bidding, including e-auction’.

It has also said that the State government shall grant the prospecting licence or mining lease, as the case may be, only after obtaining the approval of the Central government.

The ordinance empowers States to tackle illegal mining by setting up special courts for trial of offences under the Act and if felt necessary can make the offence of illegal mining in respect of notified minerals a cognizable offence.

It has also clarified that the Central government may issue directions to the State governments, for the conservation of mineral resources, or any policy matter in the national interest, and for the scientific and sustainable development and exploitation of mineral resources, for their compliance.

The new bill, it said, will also have focus on attracting private investment and latest technology and eliminating delay in administration, so as to enable expeditious and optimum development of mineral resources of the country. Further, in order to earmark funds for benefit of persons affected by mining as also for the rebuilding of infrastructure in the mining affected areas, the bill proposes to set up a District Mineral Foundation in every district affected by mining.

“This will be funded by an additional levy related to royalty, the rate of which will be prescribed by the Central government,” the ministry said thereby removing the 26 per cent profit sharing or amount equivalent to royalty.

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