The Union Cabinet has approved amendments to Mines and Minerals (Development and Regulation) Act on Wednesday. CNBC-TV18 learns from sources that the government will place the amendments as part of the MMDR Bill 2021 in Parliament before making it public.

Under the Atmanirbhar Bharat announcement, the government proposed to auction over 500 mineral mines for which it proposed changes to the MMDR Act to bring in the mining sector reforms. It is expected that these reforms will pave the way for higher minerals output and help reduce import dependence as well as give a boost to job creation.

Most of the changes proposed for the MMDR Bill 2021 were cleared by the Cabinet in January but the Ministry of Mines again proposed supplementary provisions to the MMDR Bill in February. The draft bill proposes to allow the sale of 50 percent coal produced from captive mines which were allotted prior to commercial coal mining auction. The idea is to maximise the utilisation of coal as the global energy transition is happening faster than expected. Also, the government has not seen as much enthusiasm for commercial coal auctions after 2015 auctions post deallocation of coal blocks by the Supreme Court on account of irregularities in allocation.

To encourage higher production of minerals, provisions have also been added to allow captive miners to sell up to 50 percent of excavated mineral output in a year. The captive miners will have to pay additional royalty to the states for minerals like bauxite, iron ore, chromite, limestone, and manganese.

The proposal also included the fixation of the additional amounts for granting an extension of existing mining leases of the government companies to reduce delay in mining operations. In the past, NMDC’s Donimalai iron ore mines in Karnataka were shut for a long time on account of expiry and the central government had to step in and talk with the state government to allow operations after increasing royalty from the company. The existing royalty of 1.5 times will be levied in case a government company’s expired mining lease is renewed in case of iron ore and an equivalent amount for other minerals.

The central government has also proposed to allow itself to conduct auctions of mineral mines in case of difficulties faced by the state governments. Thus far, except coal, all other minerals are auctioned by the states.

(Edited by : Ajay Vaishnav)