KOLKATA (miningweekly.com) – The Indian government has amended mining concession and development rules to enable it to start auctioning a mining lease (ML) before the current one expires.

Official notifications of the amendments have been issued and, under the Mineral Concession and Development Rules 2018, stipulate that existing leaseholders submit their modified mineral plan to respective provincial government and the Indian Bureau of Mines.

The new amendments had to be issued largely to correct the anomalous amendments incorporated in Mineral Conservation and Development Rules 2017, which stipulated that in the cases of existing noncaptive mining leases, detailed exploration over the entire potentially mineralised area under the ML shall be carried out within a period of five years from the date of commencement of such rules.

This rule in reality meant that existing ML holders could start detailed exploration of their ML area by 2022, even though 348 noncoal, noncaptive MLs are slated to expire in January 2020 and lease holders will still have two years to complete detailed exploration even though their lease had expired in the meantime.

This anomalous rule would have risked a situation wherein production from the mines would have stopped, leading to sharp falls in mineral production, even as expired leaseholders continued with exploration projects of the area, Mines Ministry officials point out.

With the latest amendments of rules, provincial governments could initiate fresh auction of  MLs for the 348 mines well before the expiry date of January 2020, the officials added.

The Mines Ministry, in a communication to local governments, said, “though the leases expire in 2020, it would be appropriate for the states to start auction of the mines by July 2019 and give successful bidders the time to mobilise, as well as time to obtain various clearances before commencing mining operations and, therefore, it is of utmost importance that the action plan for auctioning starts well before the expiry of current leases.”

Meanwhile, in response to the move by the Mines Ministry making G2 level of exploration mandatory before fresh auctions, a section of Indian miners have sought relaxation of the rule. It has been pointed out that since exploration requires large risk capital and is not always available with local governments and, hence, the need for greater inflow of private capital into exploration, it would be beneficial for the federal government to empower local governments to hold auctions of both exploration and mining instead of clubbing both together for a single mine.