Cement, steel cos could move court for delays on mining leases - Moneycontrol.com

Shreya Nandi

Moneycontrol

More than 100 cement, steel and mining companies could sue the government if they are not granted mining leases because of several administrative and procedural delays involving state governments.

State governments had given them “letters of intent (LoI)”, a formal pre-lease assurance, more than two years ago.

A new law—Mines and Minerals Regulation and Development Act (MMRDA)—enacted in January 2015 made it mandatory for companies with LoIs to secure all necessary clearances by January 2017 before they were granted formal mining leases.

With barely 19 days left, these companies, including ArcelorMittal S.A., NMDC Ltd, ACC Ltd, Ultratech Cement Ltd, and Jindal Steel and Power Limited (JSPL) among others, are now battling to get these approvals within the deadline.

Delays in approvals beyond January 11, 2017 would make them ineligible for the leases, forcing them to apply afresh and go through a detailed bidding process.

A top government official indicated the procedural approvals for these companies were unlikely before January 2017, effectively ruling them out from receiving the formal mining leases.

Environment, forest-related and other procedural clearances for 317 cases, spread across 12 mineral-rich states such as Jharkhand, Odisha, Karnataka, Andhra Pradesh and Chhattisgarh, were stuck at various levels.

“Half of the (317) cases may lapse despite our best efforts,” Mines Secretary Balvinder Kumar told Moneycontrol, adding that cases are still pending at various stages across states.

These companies may not be able to procure mining licenses even as the mines ministry, environment ministry and state government closely monitored these pending proposals in the last few months, Kumar said.

Official data shows that 138 cases were still awaiting environment and forest clearances, while 95 cases were pending at state mining and revenue departments. Some cases were stuck for want of other procedural approvals.

These companies were given LoIs before January 2015, when the government had promulgated an Ordinance to amend an older law.

Under the new law, mining leases can be granted only through an open, competitive bidding process, replacing the earlier first-come-first-served system that had drawn criticism for being arbitrary and encouraging corruption.

Companies that were given LoIs before new law was enacted were given a two-year window to get all clearances and become eligible for mining leases.

The industry has requested the mines ministry to extend deadline beyond January 11, Kumar said.

The mines ministry, however, was not in favour of extending the deadline as it would require a further amendment in law, he said.