By Our Correspondent
New Delhi, January 13, 2015

The era of license raj in mining sector is now over with the Narendra Modi-led NDA government promulgating the Mining & Mineral Development Regulatory (MMDR) Amendment Ordinance, 2015, under Article 123(1) of the Constitution on Tuesday.

Certain key provisions of the MMDR Act of 1957 now stand changed even without an act of Parliament ending the nexus of ruling politicians, mine owners, corporate in virtually reeking wind fall from the mining related activities.

The foremost key feature of the ordinance is that all mineral concessions will be granted only through auction with a few riders like transition period of a minimum of 15 years for captive mines and 5 years for other mines so that there is no break in the mining activities. The ordinance at one stroke removes discretion, more transparency and makes auctioning the sole method for allotment of mine. All mineral concessions are granted by the respective state

The other features are :

Direct auction for mining leases for bulk minerals; auction of prospecting licences-cum-mining leases for deep-seated minerals .

Uniform lease period of 50 years; no renewals; auction at the end of lease period; willsolve issues arising out of all Supreme Court judgments on second and subsequent renewals.

Central government empowered to prescribe deadlines for various processes and to issue binding directions to states.

Enabling powers for reservation for the public sector to continue.

Higher penalties and jail terms for offences; special courts may be constituted, if necessary

Central government to frame separate rules for atomic minerals.

The previous approval of the central government will not be required for grant of mineral concession except for atomic minerals, coal and lignite

District Mineral Foundation to take care of people and areas affected by mining [Section 9 (B)]

National Mineral Exploration Trust to be set up for impetus to exploration [Section 9 (C)]

Easy transferability of concessions obtained through auctions, to attract private investment and FDI

Powers to the central government to intervene even where state governments do not pass orders within prescribed timelines; this will eliminate delay by governments at present.

There will be no renewal of mining concessions.

The tenure of the mineral concession has been increased from the present 30 years to 50 years. Thereafter, the mining lease will be put up for auction.

The mining industry was aggrieved due to the second and subsequent renewals remaining pending. In fact, this led to closure of a large number of mines. The ordinance addresses this issue as well. The government has kept this in mind that the interest of mining lease holders should not be adversely affected.

The ordinance provides that the mining leases will be deemed to be extended from the date of their last renewal to March 31, 2030 (in the case of captive miners) and till March 31, 2020 (for merchant miners), or till completion of the renewal already granted, if any, whichever is later. This raises hopes of closed mines to restart operations.