Cement Manufacturers Association (CMA)

39 entire value chain. It is also inadequate from the mineral conservation point of view as existing leaseholders have invested in scientific practices and machinery suited to the local mines. A holistic view needs to be taken to avoid deterioration of confidence of Industry, business, and Investors. It is always suggested that such kind of changes in regulation do not stand to achieve the intended outcomes of job creation or GDP growth but instead they could lead to protracted litigation and send wrong signals to the domestic as well as international investor community. It is our kind request that the validity of the mining lease should not be curtailed. Workable solutions aimed at achieving the national goal could be arrived at through wider deliberations without compromising the rights of the existing investors. Key considerations for extension of validity of MLs beyond 2030 Some important points that merit consideration in context is outlined below for kind consideration of the law makers and Central Govt for effectively considering the limestone availability beyond 2030 for existing cement companies - • Cement Companies have invested heavily in end use plants, viz, the cement plants, on certainty of lease tenure and curtailing it will disrupt the main raw material supply. • In addition, several crores worth stamp duty has been paid for the existing leases, which will remain valid only till expiry of these associated mining leases, as per the amended provisions of the MMDR Act. • Each 4 million tone cement plant requires about Rs. 2000 crore in investments, which may become idle if the limestone availability & security is affected due to expiration of operating mining lease of limestone. • This disruption will cause immense job losses of about 2000 people per unit directly and indirectly. • Suddenly these acquired assets risk becoming NPAs for the cases where Bank loans exist in case the lease duration is shortened. This will tend to increase NPAs of financial institutions, such as banks etc. • There will be supply disruption if leases are not allocated back to the original lessee given that the new plan construction may take a substantial amount of time, at least 3-5 years. • There will be loss of revenue to the state governments during the auction period of these expired mining leases, in terms of Royalty, DMF, NMET, cess and excise duty for the Central Govt. • If the Mining Leases are reallocated to existing leaseholders after agreeing to match the highest bidder, it will substantially increase the cost of production, which will result in a higher cost of the product such as cement, which ultimately will impact end customers. • Major disruption will happen at cement industries in North and South India due to expiry of validity of mining leases period for captive usage. All the Cement companies have already started participating in on- going auctions in respective states, but it is quite imperative that the bid price will affect the limestone cost and will lead to an increase in cement prices. Conclusively, it can be said that there is need of relooking of expiry of mining leases in the year 2030 of captive to cement plants, or extension of interim period can be given to take care of case on case basis, for captive leases, may be of great help to cement companies. Else, this will have an adverse impact on cost of cement produced for companies and end users.