New Delhi | Apr 21, 2015: For public-sector firms, a new mining lease could virtually remain valid for up to 100 years, compared with a maximum of 50 years for their private-sector counterparts under the new Mines and Minerals (Development and Regulation) Amendment Act, 2015.
As per the draft rules released by the ministry of mines under the Act, unlike private companies, PSUs won’t have to bid all over again to extend their leases beyond the initial tenure of 50 years. Of course, the private lessee wanting to extend the tenure of a lease would have the first right of refusal.
The proposal to allow extension of the initial mining lease of state-run firms like SAIL and NMDC for iron ore, copper and bauxite for a maximum of another 50 years sans auction is aimed at protecting the long-term interest of the state-run firms and ensuring that they do not stare at a raw material crunch. The extra facility for PSUs would be applicable for mines bagged through the auction route or through the dispensation (nomination) route.
Of course, lease would end earlier if the extractable resources of the mine are exchausted. In case the mine has 10 residual years of life after the initial 50-year lease, for instance, the PSU lessee would get only a 10-years extension from the respective state government. The life of a mine depends on various issues such as its deposit, its exploration programme and the rate of production.
Seeking comments from various stakeholders by May 4 on the draft Mineral (Mining by Government Company) Rules, 2015, the mines ministry proposes,” a mining lease for minerals other than those specified in Part A and Part B of the first schedule of the Mines and Minerals (Development and Regulation) Amendment Act, 1957, granted to a government company or corporation shall be valid for 50 years.:”…upon expiry of such period of 50 years, the lessee so requests to the respective state government, the period of mining lease shall be deemed to be extended for a period of additional 50 years,” it added. The Mines and Minerals (Development and Regulation) Amendment Act, 2015 extends the tenure of the mineral concessions from 30 years earlier to 50 years after which the lease would be put up for auction.
(Source: http://www.financialexpress.com/)