The Union mines ministry has decided to seek legal opinion on whether limited liability partnership (LLP) companies should be given mineral concessions or mining leases as suggested by stakeholders in the mining industry.
The move is aimed at fast-tracking exploration of the countrys untapped mineral resources,but shedding its earlier reluctance on allowing LLPs to venture into mineral exploration,the mines ministry has decided to incorporate changes in the Mines and Minerals (Development & Regulation) Bill 2011,provided the law ministry vetted the same. LLP is an alternative business vehicle that enables benefits of the limited liability to the partners but allows them the flexibility of organising their internal structure as a partnership based on a mutually arrived agreement.
However,members of such firms should mandatorily be Indian citizens because under the existing rules,non-citizens are not allowed to form LLPs,the mines ministry has decided. The MMDR Bill states that only companies set up under the Companies Act or registered under the Indian Partnership Act and listed with the Indian Bureau of Mines would only be eligible for grant of mining leases.
But after consultations with various stakeholders,we have decided to seek the law ministrys opinion on allowing LLPs to secure mining leases provided all their members are Indian citizens and the same is vetted by the law ministry, a top mines ministry official said.
The proposal to allow LLPs was originally mooted by the corporate affairs ministry in early 2012. The MCA had suggested amending relevant sections of the Indian Partnerships Act to enable LLPs with foreign partners to secure mining leases. But the mines ministry after opposing the proposal relented when it was told that such firms with only Indian citizens as members can be made eligible. The Parliamentary Standing Committee on Coal and Steel also has also in this years Budget session endorsed the mines ministrys position on the matter and asked for facilitating such LLPs.