India  Plans Incentive For Starting Production Early From Auctioned Mines
A bulldozer moves coal at a coal mine. (Photographer: Nicolo Filippo Rosso/Bloomberg)

India Plans Incentive For Starting Production Early From Auctioned Mines


The government plans to provide incentive to mineral block allocatees for early commencement of production from the auctioned mines, a move aimed at increasing mineral output of the country and reducing imports.

The mines ministry plans to do the same through amendment of the mining rules and has sought comments and suggestions from stakeholders on the same.

"The Ministry of Mines has prepared the Mineral (Auction) Amendment Rules, 2021 seeking to amend Mineral (Auction) Rules, 2015," it said in a statement.

As part of the pre-legislative consultation, the draft amendment rules have been made available. The ministry has invited comments from all stakeholders.

A high level committee headed by Vice Chairman, NITI Aayog, on mines, minerals and coal sectors was constituted by the government to give recommendations for enhancing exploration and domestic production, reducing imports and achieving rapid growth in exports.

The panel in its report on the coal sector has recommended that the Ministry of Mines may also adopt the methodology for commercial auction as per the recommendation of the coal sector.

One of the recommendations in the panel report is for providing incentive to successful bidders for early commencement of production from the auctioned mines.

"In view of the HLC recommendations, it has been decided to provide in the Mineral (Auction) Rules, 2015 that for fully explored blocks, there would be a 50% rebate in the quoted revenue share, for the quantity of mineral produced and dispatched earlier than scheduled date of production as provided in tender document," the ministry.

The incentive will encourage the lessee to operationalise the mine and start production at an early date thereby increasing the mineral production in the country.

Also read: India Sees $55 Billion Investment in Clean Coal Over Next Decade

The objective of the amendment is to make minerals available in the market at the earliest considering that minerals are input to several industries.

"Accordingly, a draft amendment to Rule 13 of the Mineral (Auction) Rules, 2015 is proposed," the ministry said.

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