New Delhi: The Centre is working with states to start by year end the auction process for about 200 mines containing minerals such as iron ore, bauxite and limestone, Steel and Mines Minister Narendra Singh Tomar said.
Parliament passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2015 in March, paving the way for auction of these mines.
"We are trying that mines auction should start by the end of 2015," Tomar told PTI in an interview.
Since mines is a state subject, the auctions will be conducted by the states and the central government's role will be limited to framing the rules that are to be followed in the process, he said.
The states will not require the Centre's approval for auctioning mines and they can also allocate the mines for their PSUs, he added.
The Mines Ministry has identified 199 such mines that can be allocated through the auction route. They are located in mineral-rich states like Rajasthan, Jharkhand, Madhya Pradesh, Chhattisgarh, Karnataka and Odisha.
"We have introduced auction as the only way of granting mining concessions, which is bound to bring transparency, fair-play and clarity in the concession process. This will also boost investor confidence, incentivising investment in this sector," Tomar said.
The lease period has been extended to 50 years, thereby granting security to miners, who will not be driven from pillar to post for the process of lease renewals, he added.
"Soon after this government took charge, the royalty rates of minerals were revised which had been pending for the previous 5 years," Tomar said.
This move is expected to increase revenue earned by states as royalty from Rs 9,400 crore to Rs 13,300 crore. In a few states, this rise is expected to be of the tune of 45 percent, he added.
Another area that needs focus is mineral exploration, the Minister said.
"Now that auction has been introduced to dispose mining leases, exploration is no longer a choice, but a necessity, since mining blocks will be notified for auction only after conducting necessary exploration work," he added.
The government has introduced a National Mineral Exploration Trust, which will be financed by an amount equivalent to 2 percent of the royalty paid by leaseholders (at the existing rates of royalty, an amount of Rs 300 crore per year is expected to accrue to this Trust).
Tomar said that other than GSI and MECL, seven more PSUs have been notified to carry out prospecting work in the country -- RINL, SAIL, NMDC, KIOCL, MOIL, Chhattisgarh Mineral Development Foundation and Madhya Pradesh State Mining Corporation.
"The process for transfer of leases has been simplified, which is expected to attract exploration companies to carry out detailed exploration to establish resources," he said.
The Provision has also been made for granting Non- Exclusive Reconnaissance Permits for greater participation.
"The government has also provided for the establishment of a District Mineral Foundation (DMF) to enhance the standard of living of mining affected people. Existing miners will contribute an amount equivalent to the royalty towards DMF, whereas new miners will contribute an amount limited to the one-third of royalty," Tomar said.
It is estimated that DMF will receive Rs 10,000 crore on an annual basis, he added.
To check illegal mining, the MMDR Amendment Act 2015 has raised the penalty from Rs 25,000 to Rs 5 lakh per hectare, and imprisonment from 2 years to 5 years, the minister said.
