Centre rolls out fresh timelines to fast-track ops in new mines

New Delhi, Oct 19 (IANS) The Ministry of Mines has notified new rules to introduce intermediary timelines for various activities to be completed after the issue of a Letter of Intent till execution of the mining lease in order to speed up the operationalisation of mining blocks that have been auctioned to companies.

The ministry has notified the amendment to the Mineral (Auction) Rules, 2015, introducing intermediary timelines with effect from October 17, 2025, according to an official statement issued on Sunday.

Prior to the amendment, the rules prescribed only a broad time frame of three years (extendable by an additional two years) for executing the mining lease from the date of issuance of the LoI. Failure to meet this milestone resulted in annulment of the block’s auction. However, there was no mechanism to monitor progress across the various stages between the issuance of the LoI and the execution of the lease. Thus, there were limited opportunities for mid-course corrective action.

The amendment in the Rules has introduced intermediate timelines which need to be adhered to; otherwise, penalties have been prescribed for delay. Penalties for delays in meeting these interim milestones have been kept reasonable. Moreover, if the final milestone is achieved within the stipulated time frame, any penalties incurred for earlier delays will be adjusted against the auction premium payable. The overarching objective is to ensure the timely operationalisation of the mine, rather than to impose punitive measures. The amendment also prescribes incentives for early operationalisation of mines. The amendment is intended to deter potential squatting by bidders, the statement said.

In case of auction of Mining Lease (ML), only 50 per cent of the auction premium will be payable for the quantity of mineral dispatched earlier than 5 years from the date of issue of LoI. In case of auction of Composite Licence (CL), incentive for early production will be applicable on the quantity of mineral dispatched earlier than 7 years from the date of LoI for CL, the statement said.

Any delay beyond the prescribed timelines will attract appropriation of the bank guarantee of the bidder to the extent of 1 per cent for delay of each month or part of a month.

The total timeline from LoI to execution of ML without attracting any penalty in case of auction of ML is 3 years, and in case of auction of composite licence is 7 years.

In case of delay/non-compliance of timelines, a committee headed by the Director, Mines and Geology (DMG) of the state government, with members from the state Revenue and Forest & Environment Departments, and the IBM shall take a decision, after giving a reasonable opportunity of hearing to the preferred bidder. Only where delay is attributable to the bidder, a penalty will be imposed, the statement said.

The intermediary timelines are also applicable to the mineral blocks which have already been auctioned. In such a case, the preferred bidders are required to submit performance security within 6 months of the commencement of the amendment rules.

The milestones which are remaining to be complied with by the preferred bidder will be applicable, and the timeline for the first of the milestones remaining to be complied with shall start from the date of commencement of the amendment rules, the statement said.

In case a state government does not issue LoI to the preferred bidder within 30 days (increased from earlier provision of 15 days) of submission of 1st instalment of upfront payment and performance security by the bidder, the amount of 2nd instalment of upfront payment payable to the state government shall reduce by 5 per cent for the delay of each month or a part thereof in issue of LoI, the statement added.

Since the commencement of the auction regime in 2015, a total of 585 major mineral blocks have been successfully auctioned, including 34 critical mineral blocks auctioned by the Central government. Initially, the pace of the auctions was slow; however, for the past three years, on average, over 100 mineral blocks have been successfully auctioned. During the current year, in the first seven months only, 112 mineral blocks have already been successfully auctioned, according to the statement.

--IANS

sps/vd