Coal and Mines bills passed, auction of mineral deposits too

Bills passed with support of smaller parties on the last day of the parliament's budget session

GN Bureau | March 20, 2015


#mines   #minerals   #bill   #rajya sabha   #lok sabha   #arun jaitley  

The government was able to push through the coal and mines bills in Rajya Sabha on Friday. Both the bills have been approved by the Lok Sabha.

The Coal Mines (Special Provisions) Bill 2015 was passed by a division vote - 107 in favour and 69 against. The opposition Congress and the Left voted against the bill while the Janata Dal-United and the Rashtriya Janata Dal abstained. The coal bill opens the sector for commercial mining and aims to facilitate the auction of over 200 coal blocks.

The legislation on mines also seeks to allow the auction of mineral sites. The bill was passed by the Upper House  with 117 voting for it and 69 against it.

Iron ore, bauxite and other minerals like limestone and manganese ore will be auctioned for the first time under simplified rules.  The mines will be allocated through e-auction, similar to the process used for allocating coal mines.

It provides that the central government may reserve particular mines for a specific end use and allow only eligible end users to participate in the auction.

The Bill, which replaces the Mines and Minerals (Development and Regulation) Amendment Ordinance, 2015 promulgated on January 12, 2015, amends the Mines and Minerals (Development and Regulation) Act, 1957. It regulates the mining sector in India and specifies the requirement for obtaining and granting mining leases for mining operations.

The new law creates a new category of mining license i.E. the prospecting license-cum-mining lease, which is a two stage-concession for the purpose of undertaking prospecting operations (exploring or proving mineral deposits), followed by mining operations.

The Bill provides for a 50 year mining lease. On expiry of the lease, instead of being renewed, the leases shall be put up for auction, as specified in the Act. Earlier, the lease was for a maximum 30 years and a minimum of 20 years.

On labour front, the Bill provides for the creation of a District Mineral Foundation (DMF) for the welfare of persons in districts affected by mining related operations. Licensees and lease holders shall pay the DMF an amount not more than one-third of the royalty.

A National Mineral Exploration Trust (NMET) shall also be established by the central government for regional and detailed mine exploration. Licensees and lease holders shall pay the NMET two percent of royalty.

"This is an important day for democracy, Parliament and the Indian economy as the politics of obstructionism of the Congress has been defeated," Finance Minister Arun Jaitley told reporters.

"There will be a concrete arrangement of computerized auction of coal and mineral blocks," Jaitley said, adding, "All the money collected in national treasury through the auction of coal and minerals will be given to the coal and mineral-bearing states."

The coal and mines bills were taken up in the Rajya Sabha on Friday. Opposition parties on Thursday had forced deferment of consideration of the contentious mines bill on the contention that mineral-bearing states had not been consulted.

The House saw four adjournments  and Congress members even stormed the Well of the House amid demands that the bill be again sent to the Select Committee which presented its report to the House only on Wednesday.

After the adjournments, an agreement was reached between the treasury and Opposition benches that the bill will be taken up Friday.

Parliamentary Affairs Minister M Venkaiah Naidu said if the House fails to take up the bills Friday, the last day of the first part of the Budget session, the session will have to be extended.

Earlier, the Rajya Sabha saw a battle of wits over rules between the treasury benches and the opposition with both sides fielding noted advocates.

P Rajeeve (CPM) was trying to move a motion seeking re-sending of the bill to the Select Committee on the ground that mineral-bearing states were not consulted and the spirit of democracy and federalism was not followed since mines and minerals are under state subject.

“If you want to oppose, oppose the bill. Why are you obstructing? As a responsible party, you should not do it. It is unbecoming of you,” Deputy Chairman P J Kurien told the Opposition members who were shouting slogans.

Leader of the House and finance minister Arun Jaitley, an acclaimed lawyer, as well as Naidu rose to counter the argument that sparked off a fierce debate on the legislative competence of the Rajya Sabha to refer a bill that had originated in Lok Sabha, twice to a select committee.

Noting that the bill has not originated in Rajya Sabha but only referred to it from the Lok Sabha after passage, Jaitley said, “Rajya Sabha has the wisdom to question Lok Sabha once and not twice.” He also told Rajeeve that he was not referring to the right rule. "What you have done is that you have actually come out with a cocktail," he said.

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