GoM clears mining bill,but no bidding for LAPLs

The GoM,headed by finance minister Pranab Mukherjee,has brushed aside concerns of the mineral-rich states of any possible irregularities in granting Large Area Prospecting Licences (LAPL) and endorsed the mines ministry’s proposal to grant them through the ‘first-in-time’ principle. Justifying its decision,the GoM observed,“LAPLs involve high expenditure with sophisticated technology,and such high-risk projects require venture capital and,as such,the system has to be one facilitating access to venture capital from the few stock exchanges providing high-risk finance options.”

On the contentious issue of permitting competitive bidding in mineralised areas,the GoM recalled its earlier decision in which all existing applications for concessions would stand abated and the areas for which these applications were received would be regions deemed to have mineralisation.

Mineral-rich states would thereafter notify these areas for bidding for Prospecting Licences (PL) or Mining Leases (ML) based on the available data. “In order to allow the state governments to be able to identify suitable areas for grant of PL,the draft Act may provide for a one-year moratorium on filing of applications for PL,” the GoM said.

To address the apprehensions that there could be concealment of data on areas where public agencies may have worked on promotional basis as provided in Sec 4(1) of the existing MMDR Act 1957,the GoM has directed that in all such areas,such exploration agency should publicise the data and states should notify such promotional prospected areas for competitive bidding for PL/ML.

In an another decision,the GoM agreed to reduce the period of revision of royalty rates from five to three years. This the GoM did to allay apprehensions from mineral-rich states of possible revenue loss though ad valorem rates provided for inbuilt buoyancy of revenue. On the issue of ensuring one share for displaced persons in mining companies,the GoM clarified that it was in the nature of giving representation to the displaced persons and is not restricted to one share,and one share was only the minimum. However,it shot down a suggestion from tribal affairs minister Kantilal Bhuria that the level of compensation be enhanced from 26 per cent to 30 per cent,saying the principle of profit-sharing mechanism through the District Mineral Foundation was reasonable enough to address the concerns of socio-economic development.

On deputy chairman,planning commission,Montek Singh Ahluwalia’s contention that a suitable mechanism be devised for taking the cost-economics of different minerals vis-a-vis mining lease holders to keep the domestic mining sector competitive,the GoM directed that an enabling provision be included in the draft legislation to empower NMRA to review and recommend the profit-sharing percentage mineral-wise,similar to the royalty to the Centre for notification.