New Delhi | March 08, 2016:
The Cabinet is on Thursday likely to clear an amendment in the new mining law that permits transfer of captive mines granted on discretion.
Major deals among cement companies, such as those of UltraTech, Reliance Cements and Lafarge, are stuck because the Mines and Minerals (Development and Regulation) Act, 2015, permits transfer of mining leases only for auctioned mines.
Auction of non-coal mines was introduced in this law. Earlier, all non-coal mines in India were handed out by state governments on discretion.
"The proposed law was sent to the Cabinet 8-10 days ago by the ministry. It will be cleared by cabinet this week. Then it is up to Parliament," said an official who did not wish to named.
In the biggest deal in the cement industry, Aditya Birla Group's UltraTech Cement is acquiring the 22.4 million tonne cement capacity of debt-ridden Jaiprakash Associates for Rs 17,000 crore. To lessen its debts, the Anil Ambani-owned Reliance Infrastructure is selling its cement subsidiary to Birla Corp for Rs 4,800 crore.
AMENDMENT IN NEW MINING LAW:
- Major deals among cement firms are stuck because the Mines and Minerals (Development and Regulation) Act, 2015, permits transfer of mining leases only for auctioned mines
- Auction of non-coal mines was introduced in this law
- The proposed law was sent to the Cabinet 8-10 days ago by the ministry. It will be cleared by Cabinet this week
And, as a condition for its merger with Holcim, the Competition Commission of India has asked Lafarge to sell two units. The company was unable to sell its two units to Birla Corp because the mining rights could not be transferred.
In January, the government proposed the amendment to "spur merger and acquisitions in the mining sector and help in checking the stressed and non-performing assets of banks by allowing them to liquidate assets where a firm or its captive mining lease is mortgaged".
Parliament will go into recess between March 17 and April 24. The last sitting of the Budget session will be on May 8.
(Source: http://www.business-standard.com/)