India to amend MMDR Act to facilitate transfer of mining leases

11 January 2016 (Last Updated January 11th, 2016 18:30)

The Government of India is set to amend the mining law to facilitate transfer of leases that have been allotted for captive use to end-user industries.

The Government of India is set to amend the mining law to facilitate transfer of leases that have been allotted for captive use to end-user industries.

The Indian Mines Ministry said amending the Mines and Minerals (Development and Regulation) Act 1957 is also aimed at unlocking several investments that are stuck in debt-laden minerals, as well as the commodities sector.

In March 2015, the MMDR Act was amended to ensure all mining rights for major minerals are auctioned in a transparent way.

"The transfer of captive mining leases would facilitate banks and financial institutions to liquidate stressed assets where a company or its captive mining lease is mortgaged."

A clause in the law is believed to have excluded transfer of captive mines that were not auctioned.

The government will gather comments/suggestions from the general public, governments of states and union territories, mining industry, stake holders, industry associations on the proposed amendment to include provisions allowing transfer of captive mines.

The latest move is expected to encourage mergers and acquisitions in the sector and will also help in checking the stressed and non-performing assets of banks.

According to the ministry: "The transfer of captive mining leases, granted otherwise than through auction, would facilitate banks and financial institutions to liquidate stressed assets where a company or its captive mining lease is mortgaged.

"The transfer provisions will also allow mergers and acquisitions of companies and facilitate ease of doing business for companies to improve profitability and decrease costs of the companies dependent on supply of mineral ore from captive leases."