Mines and Minerals Development and Regulation Amendment Bill, 2015

Mines and Minerals (Development and Regulation) Amendment Bill, 2015: In March 2021, the Mines and Minerals (Development and Regulation) Amendment Act, 2021 obtained presidential approval, bringing amendments to the Mines and Minerals (Development and Regulation) Act of 1957. The Mines and Minerals (Development and Regulation) Amendment Bill of 2015 was presented in the Lok Sabha in 2015 to propose changes to the Mines and Minerals (Development and Regulation) Act of 1957.

This legislation serves as the regulatory framework for the mining industry in India, specifying the fundamental requirements for granting licenses and initiating mining operations.

The Mines and Minerals (Development and Regulation) Amendment Act, 2021

The Mines and Minerals (Development and Regulation) Amendment Bill for 2021 made its debut in the Lok Sabha on March 15, 2021. It garnered approval from the Lok Sabha on March 19, 2021, followed by endorsement from the Rajya Sabha on March 22, 2021. Ultimately, it received presidential assent on March 28, 2021.

The Act introduced Key changes through Amendment Bill, 2021

1. Removal of End-use Restrictions: The Bill eliminates restrictions on the end-use of minerals in future mining rights auctions. No specific mine reservations for particular end-uses will be maintained.
2. Abolishment of Captive vs. Non-captive Distinction: The Bill erases the distinction between captive and non-captive mines. It introduces an index-based mechanism through the National Mineral Index (NMI) for determining statutory payments.
3. Sale of Minerals by Captive Mines: Operators of existing captive mines can now sell up to 50% of their annual mineral extraction.
4. Transfer of Statutory Permissions: Upon the expiration of a mining lease (excluding coal, lignite, and atomic minerals), new lessees acquired through auction receive the previous lessee’s statutory permissions for a two-year period.
5. Central Government’s Auction Powers: The Bill grants the central government the authority to conduct auctions or re-auctions of mines if state governments fail to carry out timely auction processes.

Amendments Made in Mines and Minerals (Development and Regulation) Act 1957

1. The Bill adds a new Fourth Schedule to the Act.It includes bauxite, iron ore, limestone and manganese ore and is defined as notified minerals.

Mining License – Creation of New Category

• The 2015 Bill Amendment introduces a fresh mining license category.
• This category is named the “Prospecting License-cum-Mining License.”
• It encompasses both prospecting and mining stages.
• Prospecting involves initial exploration to confirm the presence of adequate mineral deposits.
• Once prospecting confirms sufficient mineral reserves, the subsequent mining operations begin.

Maximum Area – Amended

• Formerly, mining licenses were restricted to a maximum area of 10 square kilometers.
• To obtain more land, individuals had to secure additional licenses or leases.
• The 2015 Bill Amendment empowers the Central Government to increase the area limits for mining, surpassing the previous 10-square-kilometer cap.
• Consequently, there is no need to obtain extra licenses for areas exceeding 10 square kilometers.

Creation of New Institutions

The Amendment Bill provides provisions for creation of new institutions which are given below

• National Mineral Exploration Trust (NMET): License holders must pay 2% of their royalties to NMET. The Central Government will create NMET to conduct thorough mineral exploration.
• District Mineral Foundation (DMF): License holders need to pay DMF, which is up to one-third of the royalty set by the Central Government. DMF aims to assist individuals impacted by mining activities within a specific district and will be set up by State Governments.

Transfer of Mineral Concessions

• Mineral concessions can only be transferred if they were initially granted through an auction process.
• The holder of a prospecting-cum-mining lease or a mining lease can transfer it to another eligible individual with the State Government’s approval.
• If the State Government doesn’t respond within 90 days, it is assumed as approval for the license transfer.
• If the State Government explicitly opposes the transfer, then the license cannot be transferred.

Notified Minerals and Other Minerals – Auctions

In the realm of mineral resources and mining in India, two significant categories of minerals exist: Notified Minerals and Other Minerals. These categories play a pivotal role in the process of allocating mining leases and concessions through auctions.

Notified Minerals:

• Notified Minerals refer to those minerals that are identified and categorized by the Central Government as strategically important or crucial for the country’s development.
• They are typically minerals with high economic and industrial significance, often linked to key sectors like energy, infrastructure, or national security.
• For Notified Minerals, the grant of mining leases, including Prospecting License-cum-Mining Leases, necessitates the assent of the Central Government.
• This added layer of approval ensures that the extraction and utilization of such minerals are closely monitored and aligned with the country’s strategic interests.

Other Minerals:

• The term “Other Minerals” encompasses all minerals that are not classified as Notified Minerals.
• These minerals may include a wide range of resources, from more common minerals like limestone and sand to semi-precious stones.
• Unlike Notified Minerals, the grant of mining leases for Other Minerals does not require the specific approval of the Central Government.

Auctions:

• The allocation of mining leases for both Notified Minerals and Other Minerals is conducted through a transparent and competitive process known as auctions.
• Auctions are aimed at ensuring fair and equitable distribution of mineral resources while generating revenue for the government.
• Competitive bidding, which may include e-auctions (electronic auctions), plays a vital role in determining the lessee for a specific mineral deposit.
• Interested entities participate in the auction process by submitting their bids, including financial offers and technical qualifications, to secure the mining rights.

In summary, the categorization of minerals into Notified Minerals and Other Minerals is instrumental in the governance of India’s mineral resources. The auction mechanism, coupled with specific requirements for Notified Minerals, helps maintain a balance between resource utilization, economic growth, and the strategic interests of the nation.

Lease Period – 50 Years

• Under the Mines and Minerals Development and Regulation Act of 1957, the mining lease period was originally set for a minimum of 20 years and a maximum of 30 years, with the option for a 20-year renewal after the initial 30-year term.
• With the recent amendment, the lease period has been extended to 50 years.
• Upon lease expiration, the new amendment specifies that the lease will be placed for auction rather than being eligible for renewal.
• These amended rules apply to all minerals except atomic minerals, lignite, and coal.

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