Mining industry flags retrospective impact of new auction rules; govt says aim is to curb hoarding

Economic Times
Economic Times
1M ago
33 views
India's mining sector is worried about new auction rules that may impose stricter penalties on existing leases. The government claims these changes aim to prevent resource hoarding.
Mining industry flags retrospective impact of new auction rules; govt says aim is to curb hoarding
A What happened
India's mining industry is voicing concerns about amendments to the Mineral (Auction) Rules, 2015, which introduce stricter performance-linked penalties. Industry representatives warn that these changes could adversely affect existing leases. The government, however, insists that the amendments are designed to enforce discipline and accelerate production from auctioned mines, where delays have been common. Officials clarify that the new rules will not have retrospective applicability, meaning penalties will only apply to future approvals. The aim is to prevent hoarding of natural resources and allow for rebidding of assets. Since 2017, around 580 mines have been auctioned, with 77 currently operational. The Federation of Indian Mineral Industries has raised concerns about the feasibility of a six-month window for mining plan approvals, particularly for deep-seated minerals requiring extensive studies.

Key insights

  • 1

    Stricter Penalties Introduced: New rules impose stricter performance-linked penalties for mining operations.

  • 2

    Government's Justification: The government claims changes aim to curb resource hoarding.

  • 3

    Concerns Over Existing Leases: Industry fears penalties could impact current mining leases.

  • 4

    Auctioned Mines Statistics: Approximately 580 mines auctioned since 2017, with 77 operational.

Takeaways

The amendments to the Mineral (Auction) Rules have sparked significant debate within the mining industry, highlighting the tension between regulatory enforcement and operational feasibility. While the government aims to enhance production efficiency, industry stakeholders are concerned about the implications for existing leases and the practicality of compliance.

Topics

Business & Markets Economy World & Politics Policy & Regulation

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