New Delhi: Government on Thursday cleared a proposal to amend the MMDR Act to include the provisions of allowing transfer of captive mines granted through procedures other than auction.
"The Union Cabinet in its meeting, chaired by Prime Minister Narendra Modi has cleared amendment to the Mines and Minerals (Development and Regulation) Act, 1957," a source said after the Cabinet meeting.
The mines ministry has prepared the draft Mines and Minerals (Development and Regulation) (Amendment) Bill, 2016, to amend the Mines and Minerals (Development and Regulation) Act, 1957.
The ministry has been of the view that the transfer of captive mining leases, granted otherwise through auction, would facilitate banks and financial institutions to liquidate stressed assets where a company or its captive mining lease is mortgaged.
Earlier, the ministry had sought views from the public, states and industry on amending the MMDR Act to include provisions allowing transfer of captive mines granted through procedures other than auction.
The step will not only help in checking the stressed and non-performing assets of banks by allowing them to liquidate the same where a firm or its captive mining lease is mortgaged, but will spur mergers and acquisitions (M&As) in the sector.
The MMDR Act, passed by Parliament in March last year, only allows transfer of mining leases in cases where the mine has been acquired through auction.
Through the amendment, the government wants to insert a clause that says: "Provided that where a mining lease has been granted otherwise than through auction and where minerals from such mining lease is being used for captive purpose, such mining lease will be permitted to be transferred subject to compliance with terms and conditions as prescribed by central government," the ministry had earlier said in a statement.