KOLKATA (miningweekly.com) – The Indian government is considering a slew of administrative and legislative changes to improve the ease of doing business in the mining sector.

Though not officially stated, a senior official in the Steel & Mines Ministry said that, after the electoral setback in provincial elections in Bihar last Sunday, the federal government, led by the Bharatiya Janata Party (BJP), was keen to put economic reforms and growth at the forefront of the government’s agenda.

On Tuesday, the government, in a major push to increase foreign direct investment (FDI) relaxed foreign investment ceilings across 15 key sectors to “further ease, rationalise and simplify the process of foreign investment in the country and to put more and more FDI proposals on the automatic route instead of the government route where the time and energy of investors are wasted,” a government statement said.

This included permitted FDI in mining and mineral separation of titanium, enabling foreign companies to invest in value addition in titanium.

The immediate future course in the mining sector would include a government initiative to bring in an amendment to the Mines, Minerals Development and Regulation Act (MMDRA), promulgated in January.

According to the government official, the prime focus of such an amendment would be to ensure improved ease of doing business by relaxing the laws governing the transfer of mining leases from one entity to another in the case of mergers and acquisitions (M&As) of companies operating in the mining sector.

Under the new regulations, mining leases secured by companies through the new modus operandi of auction and competitive bidding were freely transferable from one entity to another in the case of M&As. However, the same was not permitted in the case of mining leases granted earlier through the preferential allotment of mineral resources.

The government had come round to the necessity of making mining leases freely transferable in all cases to ensure consolidation and restructuring in the mining sector, which alone could ensure the emergence of companies with higher economic scales, the official said.

He cited the example of the logjam in the case of Lafarge India, which acquired two cement units from Birla Cement but had not been able to secure the transfer of limestone mining leases held by Birla Cement, thereby negatively impacting the raw material security of the two acquired cement plants. The same was the present status of Ultratech Cement’s acquisition of a cement plant from Jaypee Group.

The amendments to the MMDRA enabling free transfer of mining leases were expected to be placed before the winter session of the Parliament scheduled for end-November.

In another administrative initiative, the federal government was expected to meet the demand of iron-ore miners in the western coastal province of Goa, to allow them to dump production and waste outside their respective mining lease hold areas.

Several Goa miners had communicated to provincial and federal governments that, since leasehold areas in the region were far smaller than mines in other regions, unless miners were permitted to stock production and waste outside leased areas, miners would not be able to ramp up iron-ore production to optimal levels.