“Self-Reliant India”: Govt. strategies to unlock 500 mineral blocks across open auction, counting 11 bauxite mines

The Government of India is evaluating a drive to unlock about 500 mineral blocks through an open and transparent auction by repealing Section 10A2 (b) of MMDR Act under the ‘Self-reliant India” vision.

The drive is surmounted to support unlocking of more than a billion tonne of mineral reserves and create approximately 500,000 jobs, as per the industry sources.

"A large number of potential mineral blocks are blocked due to the saving clause in section 10A2(b) of MMDR Act wherein RP/PL holder has a right to obtain the mining lease if the holder of the lease has undertaken reconnaissance operations or prospecting operations. There is no sunset clause in the relevant section unlike section 10A2(c) which provided 2 years in 2015 to execute the leases and therefore these leases are still pending for execution," said by the industry source.

The drive is knocked to boost mineral development through auctioning of non-producing mineral mining licenses. 11 bauxite mines among others are pending under section 10A2 (b). Out of 500 concessions, approximately 88 mineral concessions were allocated between 1981 and 2005 and are pending for conversion from (Prospecting License) PL to (Mining lease) ML since then. Rough estimates indicate if these mines come into the auction, the state exchequer can earn revenues of INR 40 lakh crore and state governments can earn a royalty of nearly INR 5 lakh crore through NMET, DMF and other indirect levies.

The Federation of Indian Mineral Industries (FIMI), which represents interests of mining firms, has, however, urged the government against repealing certain sections of the MMDR Act. The apex industry body of miners has said not only will it prevent loss of livelihood to the tune of 2.64 lakh in these difficult times but will also help create over 4 lakh new jobs in the mining sector.

The government’s move to repeal section 10A2(b) from MMDR Act,1957 will not only bring these resources into production and generate revenue for the exchequer from the natural asset but will also open up huge employment opportunity in the sector.

There are over 500 mining blocks that have been non-operational since last few decades. These blocks are under Section 10A2 (b) of MMDR Act, where there is no sunset clause and these concessions can be held on to in perpetuity.

Followed by the recommendations from the ministry of mines, the Union cabinet is slated to consider repealing the MMDR Act to open up such mines through a transparent auction process. Domestic metals producers are expected to actively participate in these auctions to bag these blocks to mitigate the risk of high global prices and volatility in global trade.