India’s Mines Ministry has provided the industry with a ‘composite mining licence’, conceding to demands and paving the way for the auction of mineral resources.

According to a document outlining the rules for the forthcoming mineral resource auctions, the federal government has empowered the provinces to conduct the auctions and grant composite licences, that would be entitle a successful bidder to mine “all estimated resources and minerals discovered in the area demarcated using station and differential global positioning systems”.

Simultaneously, the federal government directive stated that provincial governments would not be entitled to make any reservations of mineral resources on the basis of end-use as a precondition for granting composite licences.

This was in line with suggestions submitted by the Federation of Indian Mineral Industries (FIMI) by way of feedback on the mineral auction rules.

The FIMI had stated in a submission that “the successful bidder at the auctions should be responsible for mining all minerals, including associated minerals, if any, in accordance [with] the rules irrespective of . . . whether such a bidder had bid for such minerals or not”.

Subsequently, the holder of a composite licence would have to conduct geological exploration of the area granted to ascertain the evidence of mineral contents and submit reports to the provincial government and the Indian Bureau of Mines, the rules stipulated.

On completion of the prospecting and the determination of mineral content, the composite licence holder would need to submit an application to the provincial government for a mining licence and pay 10% of the upfront payment committed at the time of bidding at the auction.

According to a statement issued by Mines Minister Narendra Singh Tomar, as mining, in accordance with constitutional provisions, fell within the domain of provincial governments, the role of the federal government would be limited to framing the rules of auctions, as in the case of composite licences.

He said that the federal government was working closely with the provinces to get the auction started before year-end by putting at least 200 mineral resources blocks of iron-ore, bauxite and limestone up for competitive bidding.

Taking a lead, three of the most mineral- rich provinces – Odisha, Chattisgarh and Madhya Pradesh – announced this month that they were ready for the auction of 105 mineral blocks, 70 mining licences and 40 composite licences.

The Indian Parliament in March promulgated the Mines and Minerals Development and Regulation Act 2015, laying down the legal framework for the granting of all mineral resources to user industries by the auction route alone.