After land and insurance, the Centre has decided to take the ordinance route to usher in reforms in the mining sector. The Cabinet on Monday approved promulgating an ordinance, but no official communication was released by the government.

The ordinance will enable provisions of the pending Mines and Minerals (Development and Regulation) Amendment Bill, 2014, to take effect. It prescribes that all mineral concessions will only be granted through the auction route, and direct auction of mining leases for bulk minerals.

It also states that there will be a prospecting licence for deep-seated minerals. The lease period will be for 50 years, and on expiry, there will be an auction. The transition period will be for a minimum of 15 years for captive mines and five years for non-captive mines.

The ordinance states that there will not be a sudden stoppage of mining as a result of the amendment. It also says that all pending applications at the State level will be cleared except a few.

There are around 60,000 mining applications pending with various States. The ordinance empowers the Central Government to fix deadlines for various processes and also issue binding directions to States.

The Centre will frame separate rules for leases to public sector undertakings, with continuation of reservations. One of the key provisions is for higher penalties and jail terms for offences. If required, Special Courts will be formed, it says.

There is also a provision for the creation of a district mineral fund for the welfare of people in areas affected by mining. In order to attract private investment and foreign direct investment there is a provision for easy transferability of leases obtained through an auction.

The sector has taken a hit due to a ban on mining activities. The erstwhile Congress-led UPA Government had introduced a Bill in 2011 to amend the Act. But, the Bill lapsed with the dissolution of the previous Lok Sabha.

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