Cabinet clears mineral Act; foreign companies can mine too

The BJP-led Central government has cleared an ordinance to facilitate the auction of minerals, including ores used to produce iron, manganese and aluminium. In a cabinet meeting on Monday, the government approved amendments to the 57-year old Mines and Mineral (Development and Regulation) Act. Among other changes, the amendments will allow multinational companies such as Rio Tinto and Vedanta to directly bid for mineral resources in India, which were earlier only allocated to companies by the government.

About 60,000 applications for mining leases of various minerals are pending with state governments across the country. To facilitate large-scale operations, the Union Ministry of Mines has proposed to expand the area for mineral leases from 10 sq kilometres to 100 sq kilometres. Further, the lease period has been extended to 50 years, after which the lease can be re-auctioned.

By expanding the lease area for mineral exploitation, areas that fall under the ecologically sensitive zones may come under threat. In Goa, for example, most of the iron ore leases are situated within 10 kilometres of wildlife sanctuaries, where the Supreme Court had banned mining for a year. The apex court-appointed M B Shah Commission had found that hundreds of these mining leases had encroached upon wildlife and national parks in Goa. The amendment will now see a ten-fold expansion of these leases.

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