India to witness abundant mining reforms in 2021

With the central government’s approvals due for pending mining reforms expected in January and efforts continuing to bolster overall mineral output, the country’s mining sector is expected see a flurry of activities soon.

The reforms will pave the way for auctioning of at least 500 mineral blocks, Mines Secretary Anil Kumar Jain said. He further averred that calendar year 2021 will be a “bridge year between the past and the future.” Due to market forces, there is a fluctuation in steel prices, but the COVID-19 pandemic did not impact the country’s mineral production this year, Jain noted.

While many sectors had to bear the brunt of the pandemic-induced lockdown, Jain said India has “registered in iron ore some of the best export numbers in the last seven-eight months as compared to previous years.”

“The year 2021 will see hectic activities on the mining side because the reforms which have been in waiting for some time, they (reforms) are likely to be approved in the month of January which will involve some changes in the MMDR Act (Mines and Minerals (Development and Regulation) Act, 1957) and some changes in the rules all meant to liberate the sector.

However, miners’ body FIMI is of the view that 2020 has been very tough and challenging year due to the pandemic and subsequent lockdown.“For the mining sector which was already under the phase of a slowdown, the impact of COVID-19 proved to be a double whammy,” FIMI Secretary General R K Sharma said.

As per official figures, India’s iron ore export increased by 70.26 per cent to 29.261 MT in the April-September period of ongoing fiscal over 17.186 MT in the year-ago period.

The government declared mining as an ‘essential service’ and allowed the production and transportation of minerals during the country-wide lockdown, he said. Despite the adversity, mining companies showed remarkable resilience and continued mining operations to the extent possible, he added.

The government amended the mining law to facilitate enhancing coal production and reducing imports. It also aims to smoothen transitions of expiring non-captive operating mines to new bidders and deemed validity of statutory clearances for a period of two years.

After implementation of the amended mining law, 28 operative mines (24 iron ore, iron and manganese ore, and chrome ore mines in Odisha, and 4 iron ore mines in Karnataka) that expired on March 31, 2020 have been successfully auctioned.

The government’s endeavour is to enhance the mining sector’s contribution to the country’s GDP, Sharma said. About the prospects for 2021, he said the government is in the process of further reforming the mining sector by amending the MMDR Act with the objective of exploration of deep-seated minerals like gold, diamond, platinum, copper, zinc and lead, with greater participation of the private sector.

“Initiatives are being taken to ensure early operationalisation of auctioned greenfield mineral blocks (52),” he said. Rationalisation of taxes in the mining sector is also being considered. Under the Aatmanirbhar Bharat scheme, the Centre, in May, announced enhancing private investments in the mineral sector and bringing in other reforms.

The mines ministry has proposed legislative amendments to the MMDR Act, 1957 for undertaking structural reforms with the objective of accelerating growth and employment generation.

They are also aimed at resolving legacy issues to move towards an auction only regime for allocation of mineral resources, removing the distinction between captive and non-captive mines, developing a transparent National Mineral Index and clarifying the definition of illegal mining, among others.