The Government of India has taken various measures towards promoting ease of doing business by removing restrictions that inhibited the growth and development of the mining sector. This is likely to boost investor confidence, drive competition and reduce the dependency on import of substitutable minerals.

The Government of India (GoI) has introduced various measures aimed at liberalising the mining sector and enhancing investor interest and confidence. On 18 September 2019, the GoI had permitted 100% foreign direct investment (FDI) under the automatic route for entities engaged in the sale of coal and coal mining activities. However, the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) and the Coal Mines (Special Provision) Act, 2015 (CMSP Act) imposed certain end-use restrictions on minerals extracted from a significant number of coal mines, which warranted amendments as well.

In order to remedy the policy mismatch and provide operational flexibility, the Cabinet Committee on Economic Affairs (CCEA) approved the Mineral Laws (Amendment) Ordinance, 2020 (Ordinance) on 8 January 2020 to amend the MMDR Act and CMSP Act. Pursuant to the approval by the CCEA, GoI promulgated the Ordinance on 11 January 2020. The amendments specifically aim at building confidence among bidders participating in the auction of 46 operational iron ore mines whose mining leases are set to expire in March 2020.

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