Mines and Mineral Regulation In India- What’s the latest news?

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This post has been written by Anushree Tadge, a student, ILS Law College, Pune

“Mining is the art of exploiting mineral deposits at a profit. An unprofitable mine is fit only for the sepulcher of a dead mule.”

― T.A. Rickard

While the nation was experiencing a 21-day nationwide lockdown, the Centre through Union Environment Ministry issued a notification which makes it legitimate to allow transfer of “environmental clearances” that are granted to miners, whose leases are about to expire, to the new successful bidders for a period of two years, without getting bothered by any immediate assessment.

a new section 8B has been inserted into the Mines and Minerals (Development & Regulation) Act, 1957 by virtue of a official gazette notification issued by the Union Ministry of Environment, Forest and Climate Change,  This includes an immediate transfer of  all rights, approvals, clearances, licences that were previously vested with the ex leaseholder. The Ministry issued this particular notification on March 28, 2020. Also new lease holders could apply for environmental clearances even before the transfer of rights.

Mines and Minerals Development and Regulation Act, 1957 (MMDRA)j9wq

Parliament passed the legislation titled ‘The Mines & Minerals (Development and Regulation) Act, 1957’ on 28th December 1957, under this Act mineral concessions, licences and mining leases are granted by the State Government with prior permission of the Central Government.

 Mines and Minerals (Development and Regulation) Act, 1957 (MMDR) and Mineral Concession Rules, 1960 ( MCR) collectively govern and regulate mining activities all over India. This includes all minerals except for minor and atomic. The points mentioned below highlights the key features of the Act-

  • Granting mineral concessions with respect to minerals.
  • Granting areas for prospecting licences and mining lease to any individual.
  • Imposition of special condition(s) in mining lease, in prospecting licence and in reconnaissance permit.
  • Granting mineral concession in an area.
  • Relaxation of Rules in special circumstances, for the better interest of mineral development.

There are three types of mineral concessions, explained briefly below:

  1. Reconnaissance Permit (RP), This is a preliminary permit granted of a mineral through different regional and geochemical surveys and mapping. It is granted for a period of total 3 years with a maximum area of 5,000 sq. kms. A person holding this Permit is even preferred to obtain Prospecting License in the particular area if he wishes to.
  2. Prospecting License(PL), This type of License is granted for undertaking activities related to exploration, or locating mineral deposit. It is granted for a period of 3 years for a mineral or group of associated minerals. This license is renewable in a manner such that the total term for which it is granted does not exceed a period of 5 years. Now as per the guidelines not a specific limit of 25 sq. km. is to be allotted under this license but if the Central Government finds it is essential to relax the limit for benefits, it can. A PL holder has better chance than any other person to obtain ML in a particular area.
  3. Mining Lease (ML). A ML for any particular mineral or group of associated minerals is granted for period of 20 years that can be extended till 30. In State, a person can be granted a area of 10 sq. kms, but if the Central Government is keen enough for the interest of development of any mineral, area limit can be relaxed.

Further, there is no bar on foreign equity holding in companies of mining sector that are  registered in India.

A total of 13 minerals like iron, manganese ore, chrome ore, , gold, diamond, copper, lead, zinc, molybdenum, etc. which were initially reserved exclusively for usage by the, have now been declared as open for usage by the private sector.

State Governments have been empowered to

  1. grant mineral concessions
  2. permit mixing of two or more mining leases, provided that they are adjoined.
  3. to renew licenses/ leases.
  4. to approve mining plans.

Development of the Act

The MMDR Act of 1957 was amended multiple times but in the light of the most recent times in mining activities, two bills were passed in 2015 and 2016 making significant changes to several original aspects of the Parent Act.

Amendment of 2015

The Amendment led to introduction of new 4th schedule in the Act to include mining of various notified minerals. Presently, the leases were only allowed for a period of 30 years which is now extended till a period of 50 long years. It was also clarified that licences and leases were to be provided with prior permission of Union Government. The Union Government is also allowed to permit extra areas for mining but not extension of leases. Mines can also be set aside as ‘reserved’ for some specific purposes in the interest of public welfare. DMF (District Mineral Foundation) can also be established by the provisions of this Amendment, this foundation would provide for the people affected by the mining in various districts. Stronger provisions for checking illegal mining have also been introduced by the virtue of this Amendment this includes higher penalties as well as jail terms for people proved as guilty for conducting mining activities without licences. Further state govt. is also empowered to ask for fast-track trial of cases accusing people of illegal mining.

Amendment of 2016

This next Amendment to the MMDR Act was passed successfully in May 2016, the bill provides for provision under which mining leases can be transferred which are acquired by the way of procedures other than mining. The ‘leased area’ was also defined.

Anticipated Amendment

The government announced promulgation of ordinance for amendment in MMDR Act and Coal Mines Act,2015, according to the officials this amendment is likely to bring in convenience in the process of auction of mines.

According to a statement given by officials, the proposed amendments in the parent act would offer allowances for mining unexplored and even partially explored coal blocks through (PL-cum-ML) which means prospecting license cum mining lease.

Investments in the coal mining sector would also be now declared open to public at large without concentrating them in the hands of few. The amendments will also allow Foreign Direct Investment (FDI) in the coal mining sector by paving way for multinational corps as well individuals from private sectors to indulge equally. This amendment is believed to make way the production of coal in India possible without an formals delays, a small prediction of which is also given out as the amendment would make it possible for the coal industry development to take pace within 4-5 years which would have initially been possible at a speed of 7-8. . The Bill provides that licenses and clearances given to the lessee previously allotted will be further extended to the new successful bidder for a period of two years. Now during this gap of period of two years, the new lessee will be allowed to continue with the mining operations. The Bill provides that state governments can take actions for betterment even before auction of a mining lease, before its expiry.

Critical Analysis

The 2015 amendment to the MMDR Act was criticised the most, as soon as the ordinance was signed, it was predicted by experts that the prospecting-cum-mining license was useless as they believed people would find it of no use to apply for such a licence unless and untill they had found a proven reserve, a well explored one only by prospecting first. Now the most recent notification has been criticised for its glitch that would result in a controversy based on the ownership of “already mined-out material” although the announcement restricts the new owner from evacuating the already mined out material of previous owner, it cannot be ignored that fights over those explored minerals will not happen. . The period of validity of licences for being too long as 50 years was also criticised heavily as such would create unnecessary monopolies in the sector and would lead to mines being a heritage sentiment value good in few families. The amendment promises to expedite the procedure for applying for mining but it will encourage a habit of poor mining processes without legitimate exploration of resources. In March 2015, during the session in which the bill was tabled, the central government did accept the changes proposed some opposition members, some of whom staged a walk-out. Kariya Munda of BJP quoted that provisions should be made for the tribals that are displaced by mines. Also, powers allotted to the Union Government are way too much when compared with the State. People are also criticising it because it seems that only paperwork is what comes to the share of State instead of providing permissions.

Further a total of 377 deaths have been witnessed in the mining sector till now. Mining puts the lives of miners at risk as no standard safety measures and protocols are laid out.The presence of mining in a certain area causes numerous diseases like fibrosis, Pneumoconiosis, silicosis etc. which affect the workforce are well as the surrounding people. Certain guidelines are expected from the legislative bodies instead of only amending the acts to make the provisions bureaucracy friendly.

Mining future in India-

Definitely clearance procedures are hectic and they need justified expedition which would result in better utilisation of resources. Strict implementation of mining-related regulations is required regarding the ban on Rat-Hole (illegal mining through digging tunnels) and unscientific miningin order to prevent accidents in mining sector. EIA and SIA both the assessments (economic as well as social) must be conducted thoroughly before allocating the projects and rights of tribal, along with their rehabilitation must be focused upon. But currently the amendment of 2020 expected to change the dynamics of mining sector in India should absolutely reviewed as it can promote unsafe and unethical practices in mining in wake of preventing lags due to bureaucratic hazards, formalities etc. The National Mineral Policy also leads to pre embedded statutory clearances to people before auctions or transfer of leases which leads to good continuity in the activities but it needs to be understood that this provision may also result in neglecting the guidelines and ineffective working.

Conclusion

Mining is one of the most important economic activities in India. Mineral extraction is a highly regarded subject as India is one of the many countries with largest exports of iron ore, chromite, bauxite, mica etc. The mining sector contributes almost 2.4 % to India’s GDP.

Now, while there has been a considerable private sector participation in the sector of mining, the government, in form of public-sector companies is still the prime participant in the domestic mining industry. Even after this, it is claimed that India has not fully utilised and not even explored it’s potential of exploring mineral resources. Government till date has been only focusing on regulation rather than exploration and development, still various reforms have been introduced by the Indian government allowing inclusion of private sector in mineral exploration , development of mine and maintenance.

References

https://economictimes.indiatimes.com/industry/indl-goods/svs/metals-mining/govt-to-amend-mmdr-act-to-expedite-exploration-of-coal/articleshow/70771182.cms

https://pib.gov.in/newsite/printrelease.aspx?relid=114589

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