The President of India passes the Ordinance allowing auction of mineral mines

The President of India, Pranab Mukherjee, has passed the Mines and Minerals (Development and Regulation) Amendment Ordinance 2015, on Monday evening which now allows the auctioning of the mineral mines, including bauxite and iron ore, similar to the recent coal mine auction that will enable a fair distribution of mines among the producers.

The Ordinance will grant a competitive bidding option including e-auction so that there is transparency in the mineral allocation and at the same time boost the supplies for the steel and aluminium industries that are struggling to find raw materials.

The tenure for the mineral allocation will also be extended from 30 to 50 years but there would be no system of renewal of the mining lease as the mine would be put back on auction after the end of tenure. The mines that have already been allocated before the amendment will also fall under the same rules and the validity date will be extended from their last date of renewal to March 31, 2030 for captive miners and march 31, 2020 for merchant miners.

The Ordinance also states that anyone who violates the terms or is involved in illegal mining would be liable to pay up to INR 5 lakhs per hectare and/or 5 years of imprisonment.

Prime Minister Narendra Modi stressed the necessity of this Ordinance before the end of the Parliament’s Winter session citing the critical condition of the mining and the steel and aluminium production industry. The Ordinance would need to be passed by both houses within six weeks of the opening of the next session of parliament or it will lapse becoming null and void.