Chapter-3

Mining Law and Policy resources to ensure basic uniformity in

mineral administration so that the 3.1 The Central Government can exercise

development of mineral resources keeps powers for regulation of mines and mineral

pace, and is in consonance with the development to the extent such regulation

national policy goals.and development is declared by Parliament

3.3 In furtherance of the objective of by law to be expedient in the public

the National Mineral Policy, the MMDR interest, as per Entry 54 of List-I of the

Act, 1957 has been amended twice in 1994 Seventh Schedule to the Constitution of

and 1999. The Mineral Concession Rules, India. The State Governments, on the other

1960 (MCR) and the Mineral Conservation hand, have been given powers under

and Development Rules 1988 (MCDR), Entry-23 of List-II for regulation of mines

framed under the MMDR Act, 1957 have and mineral development subject to the

also been modified. Salient features of the provisions of List-I with respect to

amended mining legislation are as follows:regulation and development under the

control of th Union. Parliament has enacted (i) There is no restriction on foreign equity

the Mines and Minerals (Development holding in mining sector companies

and Regulation) Act, 1957 (MMDR Act, registered in India.

1957) under Entry 54 of List - I to provide (ii) There is greater stability of tenure of for the regula t ion o f mines and

mineral concessions, since the minimum development of minerals under control of period of a mining lease is twenty years the Union. and a maximum period of thirty years. A

3.2 In pursuance of the reforms initiated mining lease may be renewed for a

by the Government of India in July, 1991 period not exceeding twenty years and

in fiscal, industrial and trade regimes, may again be renewed for a period not

the National Mineral Policy was exceeding twenty years in respect of

announced in March, 1993. The National minerals specified in Part C of the First

Mineral Policy recognized the need for Schedule of the Act. In respect of

encouraging private investment, including minerals specified in Part A and B of

foreign direct investment and for attracting the First Schedule of the Act such

state-of-the-art technology in the mineral renewal may be granted with the

sector. Further, the policy stressed that the previous approval of the Central

Central Government, in consultation with Government. The period of prospecting

the State Governments, shall continue to license is now three years, with

formulate legal measures for the regulation possibility of renewal by a further

of mines and the development of mineral period of two years.

Mining Policy, Regulation and Conservation

Min

ing

Pol

icy,

Reg

ulat

ion

and

Con

serv

atio

n

10

(iii) Thirteen minerals like iron ore, (viii) State Governments have been

manganese ore, chrome ore, sulphur, empowered to permit amalgamation of

gold, diamond, copper, lead, zinc, two or more adjoining mining leases.

molybdenum, tungsten, nickel and (ix) State Governments have been

platinum group of minerals which were empowered to renew prospecting

reserved exclusively exploitation for licenses/mining leases in respect of

by the public sector have been thrown specified minerals listed in Part C of the

open for exploitation by the private First Schedule, and approval of Central

sector.Government is not necessary.

(iv) With the 1999 amendment, a concept (x) State Governments have been delegated

of reconnaissance operations, as a stage powers to approve mining plans in

of operation distinct from and prior to respect of 29 non-metallic/industrial

actual prospecting operations, was minerals in case of open cast mines.

i n t r o d u c e d . T h e p e r i o d o f

(xi) A time limit of ninety days has reconnaissance permit is three years. A

been prescribed for the Indian Bureau of reconnaissance permit holder enjoys

Mines and the State Governments to preferent ia l r ight for grant o f

convey the decision on mining plans prospecting licences.

submitted for approval.(V) Area restrictions notified for reco-

(xii) Time limits have been prescribed nnaissance permit , prospect ing

for conveying a decision on applications license and mining lease have been

for mineral concessions, viz. six made applicable state-wise, instead

months for reconnaissance permits, of the country as a whole.

nine months for prospecting (vi) In 1994, fifteen minerals were removed

licences and twelve months for from the list of minerals included in the

mining leases.First Schedule to the MMDR Act, 1957.

(xiii) The provisions of MCDR, 1988 With further amendments in 1999, the

were amended on 11th January, 2002 mineral limestone was deleted from the

inserting a new rule providing for First Schedule, and permission of the

intimation of amalgamation of mining Central Government is now required for

leases in 30 days, enhancing the grant of mining lease, prospecting

penalties for violation of rules, etc.license, and reconnaissance permit in

respect of only ten non-fuel and non- (xiv)Rates of royalty of major minerals

atomic minerals. These minerals (other than coal, lignite and sand for

are asbestos, bauxite, chrome ore, stowing) were revised vide Gazette

copper ore, gold, iron ore, lead, Notification dated 14.10.2004

manganese ore, precious stones and (xv)To adopt a transparent benchmark zinc.

value of minerals, guidelines for (vii) State Governments have been

computation of royalty on ad-valorem delegated powers to grant mineral

rates for different minerals have been concessions even for areas which are not

amended. compact or contiguous.

Mining P

olicy, Regulation and C

onservation

11

(xvi)In the interest of scientific mining,

minimum area for grant of mining

lease has been fixed as one hectare in

respect of small deposits (including float

ore deposits), two hectares for beach

sands or placers; and four hectares for

all other mineral deposits.

under the Chairmanship of Shri Anwarul

Hoda, Member, Planning Commission. The

terms of reference of the Hoda Committee

include review of existing procedures for

grant of mineral concessions in order to

streamline & simplify procedures,

prioritise critical infrastructure needs of

the Indian mining sector, facilitate (xvii)Provisions regarding submission of

investment to meet these needs, identify progressive mine closure plan and final

ways of augmenting State revenues, and mine closure plan and financial

allow issues relating to value addition and assurance for fulfilling the reclamation

forest and environment clearance.and rehabilitation cost have been

included.

(xviii)Statutory forms have been suitably

amended and guidelines issued for 3.5 After the introduction of the concept of

implementation of the United Nations reconnaissance permit, 202 reconnaissance

Framework Classification of mineral permits covering an area of over

reserves/resources in the annual returns 2,78,773.503 square kilometers have been

under MCDR, 1988. granted prior approval till 31.12.2005, of

which 25 reconnaissance permits for an (xix)Central Government has amended

area of over 40,607.55 square kilometers rule 66A of MCR vide Notification

were approved for grant during the period GSR 280 (E) Dated 5.5.2005 regarding

from 01.01.2005 to 31.12.2005. The states special provisions relating to

for which reconnaissance permits have atomic minerals for better

been approved so far are Andhra Pradesh management of such minerals.

(39), Karnataka (39), Rajasthan (40),

3.4 For a comprehensive review of the Chhattisgarh (24), Madhya Pradesh (20),

National Mineral Policy and to further Orissa (21), Uttar Pradesh (10), Jharkhand

improve the investment climate for mining (2), Haryana (1), Gujarat (4), West Bengal

in the country, the Planning Commission (1) and Kerala (1).

has constituted a High Level Committee

Response of the industry to the policy

measures

Min

ing

Pol

icy,

Reg

ulat

ion

and

Con

serv

atio

n

12