New Draft Mineral Policy To Curb Illegal Mining Soon
The new mineral policy will be aimed at conservation and curbing illegal mining.
The government may finalise the draft mineral policy to replace the 2008 framework soon for stricter curbs on illegal mining.
The draft will be released on the website for public consultation in a few days, an official present at a meeting between the ministry and industry representatives told BloombergQuint requesting anonymity.
The Ministry of Mines recently set up the KR Rao Committee in response to a Supreme Court directive regarding illegal mining in Odisha. The panel was asked to take a fresh look at India’s National Mineral Policy, which has not been reviewed since 2008, and come up with a new version by year-end.
The new policy will be in line with the 2008 framework but will take a stricter view on illegal mining and environment conservation, an industry representative said. The draft will not include industry’s recommendations such as increasing the tenure of existing mining leases from 50 to 90 years, he said.
As per the Mines and Mineral Amendment Act 2015, existing mining leases have to be put on auction after 50 years. This is detrimental for the industry, the representative said, adding that the existing leases are set to expire soon.
A reduction in the net effective tax rate on mineral production, which is currently 60-65 percent, was one of the demands of the industry. It’s unlikely to be considered.
The National Mineral Policy is a framework for mineral exploration in the country and issues such as taxation and awarding contracts are not covered, another industry representative said.
According to the minutes of the meeting of the committee, a higher tax burden on the mining industry in India compared to other resource-rich countries and non-competitive overseas markets is driving up the costs. A slew of levies such as royalties, net present value, an 18 percent Goods and Services Tax on the royalty, special purpose vehicle cess and contributions to District Mineral Foundation and National Mineral Exploration Trust add to costs.