Leash on MoUs

 
By Ruhi Kandhari
Last Updated: Saturday 04 July 2015

MINING companies may now find it difficult to sign deals with governments of mineral-rich states. The Union Ministry of Mines has issued draft guidelines that would make it mandatory for states to sign agreements with private mining companies in a transparent way and notify them on state websites. The draft guidelines, uploaded on the ministry website on September 15, are open for public comments.

A senior ministry official said the guidelines “introduce check points for state governments that will have to give valid, publicly disclosed reasons for signing memorandums of understanding (MoUs) and joint venture agreements with private firms.” The ministry has also notified parameters for invoking special reasons clause in the Mines and Minerals (Development and Regulation) Act for signing MoUs. The parameters include quantum of investment and innovative technology use.

Mining industry representative body, Federation of Indian Mineral Industries, said the guidelines will provide a level playing field to mining companies seeking mineral concessions. Companies would not be able to sign MoUs without obtaining mining leases.

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