State government opposes auctioning process of mining leases

Karnataka and a few other states have opposed the auctioning process of mining leases in the country. As per the new Mines and Minerals (Development and Regulation) Amendment Ordinance, the Centre has said it could pass orders in case the State government cannot do so in a particular mining lease case.

Secretary for Mines, Karnataka, Tushar Girinath on Friday said the amendment would interfere with the State’s functioning.

“Earlier, whenever we passed an order, the Centre would approve the lease. But under Section 30 of the Act, the Centre can pass an order in case the State government fails to do so. Let them (Centre) pass directives to the State by making it mandatory to follow its direction, but not start doing the work of the states,” he said.

The ordinance has also prescribed that states should auction both prospecting leases and mining leases simultaneously. However, Karnataka has objected to the proposal stating that issuing licences together might affect its revenue.

Reason: If a company decides to quote less during the prospecting lease and later finds minerals in abundance after having been accorded the mining lease, then there is a possibility of the State losing its royalty.

Girinath said the State had placed its objections on record and the Centre had asked it to provide an alternative proposal. As per the ordinance, the mining leases henceforth will be auctioned for 50 years at one go.

Karnataka has suggested that the Centre could allow the State government to call for prospecting lease separately before according the mining lease.

Rajasthan, Odisha and Madhya Pradesh have also voiced similar concerns. The objections were placed before the Additional Secretary for Union Mines Ministry R Sridharan on Friday.

Sridharan said the government had taken into consideration the “difference of opinions” from Karnataka and that they would be considered during a consultation process.