Law Ministry advises on granting mining licences

With the Law Ministry advising the Mines Ministry to follow the existing norms till the Mines and Minerals (Regulation and Development) Bill is passed in the Parliament, the air of confusion over the grant of licences to non-coal mines seems to be getting cleared.

With the Supreme Court, in its ruling on 2G spectrum scam,  the Ministry of Mines had sought the legal opinion on whether, in future, granting of licences should be through auction or not. According to existing guidelines, states, as owners of minerals, can grant mining licences after getting prior approval from the Centre for the same. “The Law Ministry has advised us to carry on with the existing practices for giving mining leases till Mines and Minerals (Regulation and Development) Bill 2011 is passed in Parliament," Union Ministry of Mines Secretary Vishwapati Trivedi said.

The MMDR Bill 2011, which has been referred to the Parliamentary Standing Committee after being introduced in Lok Sabha last December, has provisions for introducing a more transparent mechanism for granting mining leases through the competitive bidding process.

“The Bill has proposed that where there is confirmed known mineralisation, auction should be the way. But where the mineralisation is not known, it is difficult to auction. There are provisions for both kinds of concessionary systems,” Trivedi said.

The Comptroller and Auditor General (CAG) had recently claimed that not adopting the auction in allocation of coal blocks has caused a loss to the tune of thousands of crores of rupees.