Don't remove particular section of MMDR Act: FIMI

Miners' body FIMI on Wednesday asked the government to protect the rights of existing concessionaires by not tweaking or removing a particular section of the mining act which guarantees seamless transition for existing mineral concession holders to the mining stage.

A concessionaire is the holder of a concession, especially for the use of land or commercial premises or for trading rights.

The industry said the existing Reconnaissance Permit (RP) and Prospecting License (PL) holders have invested huge resources and long years to undertake risky exploration activities.

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"...government intends to do away with Section 10A(2)(b) of the MMDR Act, 1957 wherein existing concessionaires (RP/PL holders) have already been guaranteed seamless transition to the mining stage.

"We wish to submit that these existing RP/PL holders have invested huge resources and long years to undertake risky exploration activities and have helped India to discover valuable mineral deposits," Federation of Indian Mineral Industries (FIMI) said in a letter to Prime Minister Narendra Modi.

There are three kinds of mineral concessions -- Reconnaissance Permit, Prospecting License and Mining Lease.

Reconnaissance permit is granted for preliminary prospecting of a mineral through regional, aerial, geophysical or geochemical surveys and geological mapping.

Prospecting license is granted for undertaking operations for the purpose of exploring, locating or proving mineral deposit. A prospecting license holder has preferential right to obtain mining lease in the area concerned.

A mining lease is granted for undertaking operations for winning any mineral.

Acknowledging the valuable contribution of the RP/PL holders to the country, the government had introduced the particular section in 2015 to guarantee these concessionaries the right to mine the deposit if they satisfy certain conditions, thereby creating vested rights with such concession holders, FIMI said.

Unfortunately, even after five years, a large number of such RP/PL holder have yet to be granted their rights under the said section.

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The industry body further said that if the cases saved under the said section are cancelled and put up for auction, it will mean that the Centre has faltered on its Act and will lead to irreparable loss of investor confidence in the country's mineral sector apart from multiple litigations in courts.

It will also send a wrong signal to both domestic and international investors about certainty in India's mineral policy.

"We, therefore, seek your kind intervention to ensure policy certainty and security of existing vested rights under Section 10A(2)(b) which would go a long way in restoring the investors’ confidence in the Indian mineral sector.

"In view of the above, we request you... to ensure/protect the rights of existing concessionaires by not removing or tweaking Section 10A(2)(b) and in fact bring in provisions where existing concessionaires covered under Section 10A(2)(b) are immediately granted mining rights seamlessly," the letter said.