KOLKATA (miningweekly.com) – With barely 24 months left before 348 mining leases expire, only two Indian states have been able to submit reports to establish a semblance of readiness to conduct fresh auctions and continuation of operations of these mines without disruptions.

The Mines, Minerals Development Amendment Act 2015 has made auction mandatory for the allocation of mining leases. For allocated mining leases prior to the date of promulgation of the Act, lease holders had been permitted operation of the mines unit March 31, 2020, following which leaseholds of these 348 mines would have to be put up for fresh auctions.

The federal Mines Ministry has been communicating with all mineral-bearing provinces and has directed them to submit an “action plan” for holding fresh auctions for the expiring leases in August this year.

The plans have to include the finalisation of exploration proposals, exploration within the lease hold area by the lessee, the identification of the agency for exploration outside of the lease area if required, the finalisation of geological reports and agency to conduct the e-auctions.

Except for Andhra Pradesh and Rajasthan, none of the prime mineral-bearing provinces have submitted such an action plan report to the Mines Ministry, raising the spectre that current operations of these existing mines could be disrupted by auction delays, government officials said.

For its part, the Mines Ministry is expected to come out with a detailed roadmap by month-end, laying down details of the exit route of current mining lease holders, making it mandatory for existing holders to submit new exploration plans to the Indian Bureau of Mines by the end of March next year.

The government would have to issue notifications of rules for the new auctions.

As per an agenda document of the Mines Ministry, “the auction process needs to be initiated well in advance to ensure seamless transition from the existing to the new leases as the new auctioned leases would require about three to four years to be executed after all due clearances.”

Given this timeline from the Ministry and the fact that just two provinces have some kind of action plan for auction ready, a section within the government is anticipating the worst case scenario of many of these mines having to stop production caused by delays in the holding of auctions by the provinces.

The lack of timely response from the provinces has prompted doubts within the Mines Ministry whether its internal target of completing auction by July 2019 is feasible.