India has made it mandatory for mining leases granted to state-run companies to be renewed for up to 20 years, the steel ministry said Tuesday, thereby ensuring iron ore production will be secure as several leases were due to expire in March 2020. The ministry of mines has amended legislation to allow the leases to be extended before they are due to expire, "ensuring raw material security and seamless renewal of mining leases allocated to the government companies," the steel ministry said.
Under "Minerals (Mining) by Government Companies) Rules, 2015", the mines ministry said it substituted "may, for reasons to be recorded" with "shall, for reasons to be recorded."
The lease extension will be granted after an application has been made by the state-run company at least 12 months before the lease is due to expire.
However, the amendment does not apply to private sector companies seeking to extend mining leases due to expire in March 2020. There are at least 31 iron ore mining leases due to run out on March 13, 2020. The upcoming expiry has caused market concerns about "probable disruptions," the ministry said."This will also ensure price stabilization of raw materials and will have positive effect on the secondary steel industry," said Shri Dharmendra Pradhan, minister of petroleum and natural gas and steel.
The lease amendment comes after state-run SAIL was allowed in September, to sell 25% of its annual total iron ore production, which includes about 70 million mt in iron ore fines.
Previously, SAIL could not sell its iron ore fines in the open market or export them as it obtained its iron ore from captive mines.
Source : https://www.spglobal.com