logo

LS okays Bill to allow captive mines’ transfer sans auction

A Bill to allow transfer of captive mines without auction was approved by the Lok Sabha, a move that will enable banks and financial institutions to sell stressed assets to recover debts.

Mines Minister Narendra Singh Tomar said he brought the Mines and Minerals (Development and Regulation) Amendment Bill, 2016 after consulting different stakeholders including the SBI and industry associations.

Tomar said auction notices for 33 mines were out, of which auctioning for six was already done in three states and revenue of Rs 18,146 crore was generated. He added that auction notices for 42 more mines will be out in second stage and the figure will soon reach to 100.

"With the transfer...suppose, if one industry is sick, (if not transferred), then it will lead to unemployment, the local economy will be hit," Tomar said replying to a debate on the bill. Earlier, the ministry had sought views from the public, states and industry on amending the MMDR Act to include provisions allowing transfer of captive mines granted through procedures other than auction.

Responding to queries on the role of states in this, the minister said states will do the transfer and the revenue will go to the treasury of the states.

The Mines and Minerals (Development and Regulation) (Amendment) Bill, 2016 was brought as the government was of the view that the transfer of captive mining leases, granted otherwise through auction, would facilitate banks and financial institutions to liquidate stressed assets where a company or its captive mining lease is mortgaged.

The step will not only help in checking the stressed and non-performing assets of banks by allowing them to liquidate the same where a firm or its captive mining lease is mortgaged, but will spur mergers and acquisitions in the sector. The MMDR Act, passed by Parliament in March last year, only allows transfer of mining leases in cases where the mine has been acquired through auction. According to Statement of Objects and Reasons, the Bill will provide for transfer of captive mining leases granted otherwise than through auction in order to facilitate legitimate business transactions.

"It was also felt necessary to define 'leased area' in order to expand the scope of lease area by including therein dumping of mineral rejects, it said. Under the existing law transfer of mineral concessions shall be allowed only for concessions which are granted through auction.

The Central government has received representations from industry associations stating that the provision has caused difficulties in merger and acquisition of a company having captive leases, it said.

The Central government has also received representations seeking clarification regarding areas for dumping of mining wastes in view of the observations made by the Supreme Court, it added. 
PTI

PTI

Our contributor helps bringing the latest updates to you


Share it
Top