GoM pushes mines ministry to settle for prospecting licence bidding

Group of Ministers,set up to vet mining Bill,quells states fear of losing revenue.

Yielding to pressure from Chhattisgarh and Orissa governments,the Group of Ministers (GoM) has recommended competitive bidding for direct prospecting licences in mineralised areas. The move effectively seals the fate of the mines ministrys proposal,which envisaged granting mining concessions in unknown mineralised ares on the first-in-time basis.

In its final meeting on July 7,the GoM under the chairmanship of Finance Minister Pranab Mukherjee acknowledged the concerns of the Chhattisgarh chief minister Raman Singh and his Odisha counterpart Naveen Patnaik on the need for inserting suitable provisions in the Mines and Minerals (Development & Regulation) Bill 2011,which would not deprive their administrations of revenue to be accrued from the grant of mineral concessions.

The GoM has also pitched for setting a floor price for competitive bidding. This,the GoM believes,would promote participation of genuine players and rope in more investment for the sector. The GoM apparently has left it to the states and the mines ministry to evolve a mechanism with defined parameters on how to determine the floor price.

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It also proposed to increase the time limit for disposal of applications for prospecting licences to four months.

Responding to another serious concern of Raman Singh that retaining the first-in-time methodology would trigger a mad rush by applicants,the GoM decided that all applications pending on the date of commencement of the new Act would be deemed to be lapsed (barring those awaiting seamless transition,or the ones which have secured prior approval for grant of concession).

The state government should be given a moratorium for receiving fresh applications for prospecting licence,the minutes said. Mines Minister Dinsha Patel had told Pranab Mukherjee in a letter on June 8 that there should be no bidding for granting non-exclusive Reconnaissance Permit.

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