India issues new ordinance to start mine licence auctions

13 January 2015 (Last Updated January 13th, 2015 18:30)

The Indian Government has issued an executive order to enable mining licences for iron ore, bauxite, zinc, copper and other minerals to be awarded via auctions.

The Indian Government has issued an executive order to enable mining licences for iron ore, bauxite, zinc, copper and other minerals to be awarded via auctions.

The latest executive order, which is not applicable to lignite and atomic materials, follows a similar directive that was issued in October for coal mines.

The order introduces a new clause easing permit renewals for existing mines and is said to put an end to a six-decade old system that awarded mines at the discretion of the provincial and federal governments, Bloomberg reported.

"Under the new ordinance approved by President Pranab Mukherjee, all mining leases will be now granted for a period of fifty years."

India's Government, which is struggling to gain support for its policies in the upper house of parliament, released the new mining ordinance bypassing the traditional route of legislation.

The order set aside an older law and hindered the process, in addition to leading to mine closures.

Companies with permits allowing mines to supply their own factories will be extended to 31 March 2030 and those that sell their minerals are to receive extensions until 31 March 2020.

Under the new ordinance approved by President Pranab Mukherjee, all mining leases will be now granted for a period of fifty years, instead of thirty years.

The ordinance is required to have the support of both houses within six weeks of the opening of the next session of parliament; failing this, it will lapse.

The mines up for auction will be identified by state governments and the bidding rules will be prepared by the federal government.