Centre moots strict norms for private and state JVs

The Ministry of Mines issued the draft guidelines for tightening the disclosure norms, after a stern  message by Mines Minister BK Handique that private firms would not be allowed to avail the concessions given to the state PSUs through "backdoor" entry.
Many state PSUs have tied up with private firms to launch their projects in absence of an independent mining lease.

Orissa Mineral Corporation (OMC) and Mysore Mineral Ltd (MML) have tied up with with Vedanta Group firm, which was denied permission to mine bauxite at Niyamgiri recently on certain violations, and JSW Steel Ltd for mining,respectively.

"In the name of PSUs, no more back door entry will be allowed. Yes, they (private companies) have made back door entries," Handique told reporters here.
In the proposed guidelines, on which the states have to give their comments by September 20, the Mines Ministry has said that its approval would be necessary for handing out any concessions to these JVs even though there is a provision for the same in the MMDR Act. It asked states to exercise restrain from forming such pacts "indiscriminately" .

"An MoU for exploitation of a mineral resource at a specific location in anticipation of a concession or reservation will be deemed to be incompatible with the principles of fair play," the Ministry said.

State governments, at present, taking advantage of the existing MMDR Act provisions sign MoUs with private firms under "special reason". The Centre will discuss the subject with the state governments here on September 21 in a meeting.
There must be a clear policy and norms for allowing the benefits under the special reasons. Disclosure on investment size and technology etc should be given, it said.
Presently pacts under special reason give the MoU applicant an unfair advantage in relation to other applicants for the same area, it said and added, "it would contradict the policy of first in time for non-notified areas (for mining) or most meritorious for notified areas.

It said the pacts signed by the state governments "must be in conformity with the State Mineral Policy and must be entered into in a transparent manner and suitably notified in the State Website."
The Mines Ministry is working to bring in transparency in the sector through a new legislation which is likely to be presented in the Winter Session of Parliament.

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