India government has notified the amended mining law which allows the seamless transfer of regulatory approvals like forest and environmental clearances to new owners of operational iron ore mines. This ordinance will come in effect from 10th Jan 2020.
Our Interpretation of the Mineral Law Amendment 2020
1. Ordinances are laws that are promulgated by the President of India on the recommendation of the Union Cabinet, which will have the same effect as an Act of Parliament. They can only be issued when Parliament is not in session. They enable the Indian government to take immediate legislative action
2. State government can auction mining leases before expiry of lease period
3.Successful bidder of the expiring mining leases through auction are deemed to have acquired all rights, clearances, approvals vested with previous bidder for a period of 2 years
4. The transfer is subject to condition that successful bidder will apply and acquire new licenses, clearances and approvals within 2 years from the date of grant of new lease
5. This means successful bidder has to operate at EC limits granted to previous lessee for a period of 2 years (state government has emphasized to produce at-least 80% of previous year’s production)
6. Successful bidder can start operations on the land in which mining operations were carried out by previous lessee for a period of 2 years.
Market expects the amendment to mining law will ease transition of iron ore mines to winning bidder post auction of the blocks whose leases are set to expire in March. This will limit the scope of disruption in iron ore supply subject to things goes as per schedule.
To learn how the mines auction 2020 unfolds, be a part of SteelMint Events’ 4th Indian Iron ore, Pellet and DRI Summit which is scheduled on 2-3 March 2020, in Hotel LaLiT, New Delhi.
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