Major Mineral Mining Leases of Pre-Auction period rendered void by the Supreme Court

Supreme Court has cancelled all mining lease applications of major minerals like Iron Ore and Bauxite that were pending before the auction process came into play. The reasoning given by Supreme Court is that minerals are national resources and they should be allotted through auctions only. An amendment was made to the Mines and Minerals (Development and Regulation) Act in 2015, which made auction mandatory for allocation of mining leases.

Coal block allocations made by the United Progressive Alliance Government were cancelled by the Supreme Court few years back on account of arbitrariness and lack of transparency. But the mining leases that were applied for and granted before this judgement were under the line of fire and cases flooded the Supreme Court and High Courts all over the country. Many High Courts even gave conflicting judgements concerning the same matter.

The reasoning given in one such case of Bhushan Power and Steel Ltd was that according to Supreme Court order of 2012, the Odisha State Government should recommend to the Central Government allocation of iron-ore mining lease for their proposed iron and steel plant in Sambalpur district of Odisha.  However after hearing the arguments, the Supreme Court bench was convinced that acting upon the recommendation of Odisha Governement was not mandatory for Centre as the rules regarding allocation of mining leases had changed.

The outcome of above action is predicted to be highly beneficial for Central Government as it is said to bring in an additional revenue of Rs. 50,000 crores.