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.
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(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.
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(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
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