Miners want blocks free from encumbrances at auctions

As development of a mine gets stuck due to delays in obtaining a string of approvals, miners have asked for making the process hassle free at the stage of auctions.

Before a mining block is offered for auctions as direct ML (mining lease), the concerned state government should ensure that it is free from all encumbrances.

“The mining lease being auctioned should be free from all encumbrances. No issue related to forest land, wild life sanctuary, proximity to protected monuments and permission from the land owners should crop up once the successful bidder starts obtaining clearances for land”, said R K Sharma, secretary general with the Federation of Indian Mineral Industries (Fimi).

In case of auction of a mineral block as direct ML, the successful bidder is tied to a time bound programme to develop the mines and to bring the mine to production failing which the bidder is liable to face penalties.

The preferred bidder who wins the mineral block at auctions gets a Letter of Intent (LoI) from the respective state government upon payment of the first installment of the upfront payment. Fimi has suggested to the Union mines ministry that along with the LoI, the state government needs to hand over a true, attested copy of all maps and relevant documents to enable the successful bidder to facilitate the project.

The government can also simultaneously intimate the successful bidder the name and designation of the single point of contact who can guide the successful bidder through the entire project till commencement of operations. For unsuccessful bidders, the bank guarantee should be returned within 48 hours of completion of the bidding process.

In case of grant of composite license, the state government can permit retention of the area by the holder of composite license where potential for minerals has been established for further exploration work for bringing the exploration to the level of G2/G1 for ensuring parallel exploration and mining operations on the area of composite license. This step can incentivise the composite license holder for undertaking the detailed exploration for establishing the mineral deposit.