Wednesday, 1 April 2015

Explanation of new Mining bill

The Mines and Minerals (Development and Regulation)  Amendment Ordinance, 2015 was promulgated on January 12, 2015. The Ordinance amends the Mines and  Minerals (Development and Regulation) Act, 1957. This earlier act regulates the mining sector in India and  specifies the requirement for obtaining and granting  mining leases for mining operation.
The Rajya Sabha on Friday passed the amendment bill relating to the development of mines and minerals which paves the way for auction of blocks for prospecting. Following are some of the highlights of the legislative measure:
  • Mining licence for 50 years, as against 30 now. No renewal of mining concessions, unlike the original act of 1957. All concessions will now be granted by State governments through auctions.
  • A new schedule to include mining of bauxite, iron ore, limestone and manganese ore – now called notified minerals .
  • State governments to grant mining leases and prospecting licence-cum-mining leases with the central government’s approval .
  • The central government will prescribe the terms and conditions for selection of bidders as also the procedure for auctions. .
  • The central government permitted to increase the area allowed for mining, instead of granting additional leases .
  • The central government may reserve some mines exclusively for some specific purposes.
  • District Mineral Foundation to be set up in mining areas to address local area grievances.  One third of the royalty money will be provided to these DMFs, which will spent on the development of the local area.
  • National Mineral Exploration Trust to be set up for regional and pan-India planning.
The immediate effect of the MMDR Bill 2015 will be the following:
  • To create a new category of mining license i.e. the prospecting license-cum-mining lease, which is a two stage-concession for the purpose of undertaking prospecting operations (exploring or proving mineral deposits), followed by mining operations.
  • Change the area of mining, by allowing the Central Government to extend the area limits of mining, instead of providing multiple mining leases.
  • In the earlier law, a mining lease was granted for a maximum of 30 years and a minimum of 20 years and could be renewed for a period not exceeding 20 years.  Under the new law, the lease period for coal and lignite remains unchanged.  For all minerals other than coal, lignite and atomic minerals, mining leases will be granted for a period of 50 years.  All mining leases granted for such minerals before the Ordinance shall be valid for 50 years.  On expiry of the lease, instead of being renewed, the leases shall be put up for auction, as specified in the Act.
  • The  state governments will grant mining leases for notified minerals and prospecting license-cum-mining leases for other minerals.  It shall also notify geographic areas and the terms and conditions of such leases.  All such leases shall be granted through auction by competitive bidding, including e-auction.
  • The central government shall prescribe the terms and conditions, and procedure for auction, including parameters for the selection of bidders.  For mining leases, the central government may reserve particular mines for a specific end use and allow only eligible end users to participate in the auction, if found necessary.