A fresh set of amendments to the Mineral (Auction) Rules, 2015 is being prepared by the Centre with an aim to cut the time between the auction of mines and the start of production.
Under these modifications, intermediary deadlines for tasks to be finished with a significant development following the issuance of the letter of intent until the mining lease is executed will be implemented. The percentage of performance security to be appropriated for delay in completion of milestones is also specified by the proposed modifications to rules.
"States will be empowered to decide if delays in mine operationalisation are because of the successful bidder. If established, the process of deducting amounts from the payment security will begin," a senior official told ET, adding the preferred bidder will recoup or top-up any appropriated performance security within two months. Mining corporations will benefit from a reduction in the upfront payment required if delays result from the state government's failure to provide clearances. It is suggested that these regulations be applied retroactively to mines that have already been awarded milestones and that the preferred bidder still needs to comply with.
"Upfront payment payable shall reduce by by 25% for the delay of each month in issue of the letter of intent and the preferred bidder shall pay only the remaining amount as the first instalment," the official said.
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