LS passes bill to provide fixed 50-year production lease for offshore minerals

New Delhi, Aug 1 (PTI) A bill to provide a fixed 50-year production lease for offshore minerals was passed by Lok Sabha on Tuesday amid protests by the opposition over the situation in ethnic-violence hit Manipur.

Replying to a brief discussion in the House, Coal and Mines Minister Pralhad Joshi said under the Offshore Areas Minerals (Development and Regulation) Amendment) Bill, 2023, the government seeks to introduce auction as the route to award production lease for offshore minerals.

Joshi said the bill also proposes to introduce a composite licence, which is a two-stage operating right granted for the purpose of undertaking exploration followed by production operation.

The composite licence would also be granted only through auction by competitive bidding to the private sector, he said.

“We are opting for the auction route. These people who are protesting here, their relatives will not be getting anything. This is the reason why they are opposing the bill,” Joshi said as opposition members raised slogans against the BJP-led government over the Manipur issue.

The bill aims at introducing a four-year time-line for commencement of production and dispatch after the execution of composite licence or production lease, and time-line of two years (extendable by one year) for re-commencement of production and dispatch after discontinuation.

According to the Statement of Objects and Reasons of the bill, it proposes to remove the provision for renewal of production lease and provide a fixed period of 50 years for production lease similar to the provisions of the Mines and Minerals (Development and Regulation) Act, 1957.

Besides, in the case of atomic minerals, the grant of exploration licence or production lease would be made only to a government or a government corporation.

The bill also provides a grant of production lease to the private sector only through auction through a competitive bidding process.

It will enable the central government to frame rules for the conservation and systematic development of minerals in offshore areas and for the protection of the environment by preventing or controlling any pollution which may be caused by exploration or production operations.

The Statement of Objects and Reasons said that India, despite having a unique maritime position with a long coastline touching nine coastal states and four union territories and two million square kilometres of exclusive economic zone, has not been able to tap its vast offshore mineral resources for its developmental needs.

Previous efforts of allocation of offshore blocks did not bear desired results due to a lack of a legal framework for a fair and transparent mechanism to allocate the operating rights in the Act and the stalemate caused due to pending litigations over the allocation of blocks.

There is an urgent need to introduce auction as the method of allocation of operating rights in the offshore areas to enable early allocation of operating rights through a transparent and non-discretionary process, it said.

“Also, there is a need to adopt other features of the Mines and Minerals (Development and Regulation) Act, 1957, such as the establishment of trusts for mining-affected persons and encouraging exploration, removing process of discretionary renewals and providing uniform lease period of fifty years, the introduction of a composite licence, providing for area limits, easy transfer of composite licence or production lease, etc,” the Statement of Objects and Reasons said.