Fresh package likely to lift mining sector
The government is planning another booster policy dose to attract investments in the mining sector, according to official sources here.
New Delhi: The government is planning another booster policy dose to attract investments in the mining sector, according to official sources here.
Mining has been identified as a critical activity that needs a big push to help other capital intensive and employment generating industries. The sector is in the grip of a slowdown that has seen declining investment and production.
The informed sources said that the mining package would revolve around allowing existing operations to flourish while giving sops to boost new operations.
According to officials, the concept of captive mines would be diluted to allow all mines to use the mineral resources either for captive consumption of end-use plants or sold for commercial purposes.
This would be a major reform that would allow companies such as Tatas, Vedanta and JSW to commercially sell out from their captive iron ore mines for higher gains.
Already, state-owned SAIL has been permitted to commercially sell iron ore from its captive mines.
A high level committee headed by the NITI Aayog Vice Chairman and having top representation from the Finance, Mines, Coal and Environment Ministries has suggested that all mines henceforth be auctioned for commercial production.
For companies taking mines largely for captive use, 50 per cent of production from mines would be permitted to be sold in the open market.
The package would also include changes in law that would offer full mining leases to global companies which decide to take up the risk of finding new mineral resources in unprospected areas.
Currently, the initial exploration activity (reconnaissance permit) is given on non-exclusive basis, meaning an explorer may not automatically get the lease to mine the mineral.
This would change under a new composite mineral mining licence where the explorer would automatically get to mine and reap benefit from its find.
Also, the investor would be free to sell his mining licence after one year of mining if 15 per cent of the agreed investment has already been spent.
In yet another relief for the mining sector, the government is set to make provisions in the mining legislations that would allow transfer of captive mining rights in favour of the purchaser of an end-use plant.