Multiple mining bid options

The Ashok Chawla committee has recommended a variety of bidding mechanisms for mining leases and favours linking the profit-sharing mechanism to royalty rather than net profits of miners. It has questioned the wisdom of a first-in-time principle for areas of unknown mineralisation potential.

The draft for a new mining bill empowers states to call for competitive offers but the committee argues it forecloses such an option with the initial award of licences without bids,coupled with security of tenure. It provides for a prospecting report,followed by a feasibility study based on this. The panel recommends rather that high-potential areas be bid out for prospecting licences on the basis of reconnaissance information,with security of tenure for transition to mining leases.

For other areas,the committee suggests giving multi-mineral reconnaissance licences without security of tenure,with bonuses in case their data lead to a successful auctioning for prospecting licences.

On profit sharing,the panel observes that net profits can be volatile and calculations subject to manipulation,hence the royalty structure should be enhanced. A portion can be earmarked for transfer to a non-lapsable fund that can be managed by district authorities.