UNIVERSITY OF PETROLEUM AND ENERGY STUDIES
COLLEGE OF LEGAL STUDIES
LAW OF MINING ASSIGNMENT
NEW MINERAL POLICY 2015
Submitted to:
Submitted by:
Sr. TOBI THOMAS
ADITI GUPTA
(UPES)
500012340
B.A L.L.B
Roll No. 7
National Mineral Policy
The Government had approved the new National Mineral Policy, 2008 on
13th March 2008. The new Policy enunciates measures to streamline and
simplify the procedures for grant of mineral concessions, develop a
sustainable framework for optimum utilization of the country's natural
mineral resources for the industrial growth in the country and at the same
time improving the life of people living in the mining areas which are
generally located in the backward and tribal regions of the country.
Apart from these, the National Mineral Policy has enunciated several policy
measures that seek to strengthen the framework/ institutions supporting the
Indian Mining sector, which include the Indian Bureau of Mines, Geological
Survey of India and State Directorates of Mining and Geology. The new Policy
spelt out measures to optimize the scientific mining and exploration of the
country's
mineral
resources.
Some
of
the
important
measures
are
enumerated below:
An Act to replace the existing Mines and Minerals (Development and
Regulation) Act, 1957 has been formulated and the draft Act has been posted
on website of Ministry of Mines for comments.
In order to ensure implementation of the non-legislative policy initiatives
given in the National Mineral Policy, 2008, the Ministry of Mines has
constituted an Implementation Committee vide Ministry of Mines Order No.15
(1)/2008-MV(Pt.) dated 23.06.2009 to oversee the implementation of the
action points arising out of the National Mineral Policy, under chairmanship of
the then Additional Secretary (Mines).
National Mineral Policy (NMP), 1993
In pursuance of the reforms initiated by the Government of India in July, 1991
in fiscal, industrial and trade regimes, the National Mineral Policy was
announced in March, 1993. The National Mineral Policy recognized the need
for encouraging private investment including foreign direct investment, and
for attracting state-of-art technology in the mineral sector. The policy
stressed that the Central Government, in consultation with the State
Governments, shall continue to formulate legal measures for the regulation
of mines and the development of mineral resources to ensure basic
uniformity in mineral administration so that the development of mineral
resources keeps pace, and is in consonance with the national policy goals.
PREAMBLE
Government of INDIA has considered it appropriate to promote proper use of
huge mineral resources of the INDIA for sustainable economic development
of its people and the nation as a whole by amending its existing mineral
policy. To achieve this, it has been decided to simplify the rules and
procedures so as to ensure scientific, safe and eco-friendly mining,
productivity, conservation and cost-effectiveness, social commitment, zero
waste mining, health and welfare of people. As a major resource for
development the extraction and management of minerals has to be
integrated into the overall strategy of the countrys economic development.
Mines
and
Minerals
(Development
and
Regulation)
Bill,
2011
approved
The Union Cabinet has approved the proposal to introduce the Mines and
Minerals (Development and Regulation) Bill (MMDR Bill), 2011, in terms of
National Mineral Policy, 2008 in Parliament and also to repeal the existing
Mines
and
Minerals
(Development
and
Regulation)Act,1957.
The new MMDR Bill, 2011, aims to introduce better legislative environment
for attracting investment and technology into the mining sector by the
following:
States may call for applications in notified areas of known mineralization
for prospecting based on technical knowledge, value addition, end-use
proposed
ore
-linkage
etc.
and
to
invite
financial
bid;
States may grant of direct mining concessions through bidding based on a
prospecting report and feasibility study in notified areas where data of
minerals
is
adequate
for
the
purpose;
State Government may set up a minimum floor price for competitive
bidding;
Special provisions for allowing mining of small deposits in cluster, where
cooperatives
National
can
Mining
Regulatory
apply;
Authority
for
major
minerals
State
Governments may set up similar Authority at State level for minor minerals;
Imposition of a Central cess and a State cess, and setting up of Mineral
Funds
at
National
and
State
Level
for
capacity
creation;
For the purpose of sharing the benefits of mining with persons or families
having occupation, usufruct or traditional rights in mining areas, and for local
area infrastructure, creation an amount equal to royalty in case of mineral
other than coal, and 26% of net profits, in the case of coal, has been
proposed to be credited each year to district Level Mineral Foundation;
Sustainable and scientific mining through provision for a Sustainable
Development Framework;
Consultation with local community before notifying an area for grant of
concession,
and
for
approval
of
Mine
Closure
Plans;
Enhanced penalties for violation of provisions of the Act, including
debarment of person convicted of illegal mining for future grants and
termination of all mineral concessions held by such person; and
Establishment of Special Courts at the State level for speedier disposal of
the
cases
of
illegal
mining.
The new draft MMDR Act would have financial implications in the creation of
an independent National Mining Tribunal and National Mining Regulatory
Authority at the Central Level, and the expenditure involved in the capacity
building of the Indian Bureau of Mines. The funds for this expenditure are
likely to be met from levy of cess at the rate of 2.5% on the basis of
Customs/Excise Duty.
The new MMDR Act would be implemented immediately after receiving
Parliamentary
approval
commencement
and
would
President's
be
assent,
notified
and
date
of
separately.
The approval will help in developing the country's mining sector to its full
potential so as to put the nation's mineral resources to best use for national
economic growth, and ensure raw materials security in the long term
national interest.
Sustainable Development
Mining is closely linked with forestry and environment issues. A significant
part of the nations known reserves of some important minerals are in areas
which are under forest cover. Further, mining activity is an intervention in the
environment and has the potential to disturb the ecological balance of an
area. However, the needs of economic development make the extraction of
the nations mineral resources an important priority. A framework of
sustainable development will be designed which takes care of bio diversity
issues and to ensure that mining activity takes place along with suitable
measures for restoration of the ecological balance. Special care will be taken
to protect the interest of host and indigenous (tribal) populations through
developing models of stakeholder interest based on international best
practice. Project affected persons will be protected through comprehensive
relief and rehabilitation packages in line with the National Rehabilitation and
Resettlement Policy.
BASIC FEATURES
To develop and exploit mineral resources in a scientific and sustainable
manner, taking into account the interest of the State, People and
Environment.
To facilitate exploration work for accurate reserve estimation of the
mineral deposits.
To review the existing practice of random exploitation of mineral
resources and to regulate the same.
To carry out geological mapping of mineral resources.
To promote necessary linkages between mining and mineral industry.
To regulate investment in mining and generate employment for local
population.
To promote research and development activities in major mineral
sector.
To ensure establishment of appropriate training facility for human
resource development to meet the man power requirement of the
major mineral industry.
To minimize adverse effect of major mineral development on the
environment and ecology through appropriate preventive and control
measures.
To ensure conduct of mining operation with due regards to safety and
health of all concerned
To create a database on major mineral resources in the state.
To take steps to promote geo-tourism.
To promote private sector participation in various aspects of mineral
development, which includes exploration, infrastructure building,
mining and other mining related activities and mineral based
industries.
To safeguard the rights of all stakeholders including rights of affected
population.
Towards Sustainable Mining and Mineral Conservation:Based on the broad objectives of the major mining policy the state shall go
for a paradigm shift to ensure effective regulation and sustainable growth
and development of mining in the state. Directorate of Mines and Geology
shall undertake the following measures for promoting sustainable mining in
the state and ensure fair and transparent regulatory regime.
To exploit geological potentials of the state on a scientific basis after
due exploration and prospecting.
Development of a proper inventory of resources and reserves, a mining
tenement registry, preparation of mineral atlas on priority.
State Directorate of Mining and Geology will be strengthened with man
power, equipment and skills.
Mining is closely related to the forest and environment. A suitable
framework will be designed to ensure mining along with suitable
measures for restoration of the ecological balance that had been
disturbed so far.
Value addition will be actively encouraged. Value addition will go hand
in hand with the growth of the mineral sector as a stand-alone
industrial activity.
The minerals have to be conserved for the future generations.
Suitable infra-structure facilities to be created financed by user fee
concept
Wastage
of
natural
resources
amalgamating small deposits suitably.
will
be
prevented
by
The closure of mines has to be systematically planned and Ecological
balance will be restored including utilization of existing pits for water
conservation and harvesting of crops.
The fair share of revenues collection from minerals will be utilized to
improve the standard of living of those residing in mining areas.
Take steps both regulatory and developmental to ensure zero tolerance
to illegal mining of any kind.
Research and development in minerals will receive prime importance
and a comprehensive institutional framework for R & D and training
will be developed.
REGULATION OF MINERALS
Management of mineral resources is the responsibility of the Central
Government and the State Governments in terms of Entry 54 of the Union
List (List I) and Entry 23 of the State List (List II) of the Seventh Schedule of
the
Constitution
of
India.
The Mines
and
Minerals
(Regulation
and
Development) Act, 1957 lays down the legal frame-work for the regulation of
mines and development of all minerals other than petroleum and natural
gas. The Central Government have framed the Mineral Concession Rules
1960 for regulating grant of prospecting licences and mining leases in
respect of all minerals other than atomic minerals and minor minerals. The
State Governments have framed the rules in regard to minor minerals. The
Central Government have also framed the Mineral Conservation and
Development Rules, 1988 for conservation and systematic development of
minerals. These are applicable to all minerals except coal, atomic minerals
and minor minerals.
The Central Government in consultation with the State Governments,
shall continue to formulate the legal measures for the regulation of mines
and the development of mineral resources to ensure basic uniformity in
mineral administration and to ensure that the development of mineral
resources keeps pace, and is in consonance with the national policy goals.
The regulation of mines and development of mineral resources in accordance
with the national goals and priorities shall be the responsibility of the Central
and State Governments.
Pollution And Its Social Impact: Control of Pollution due to
transportation and ground water preservation.
Polluter pays principle will be strictly engaged and applied while targeting
the basic objective of prevention of pollution and in this regard suitable
provisions would be included in the transportation rules including:
Washing of tyres of truck and other vehicles before exiting the mining lease
area and entry on public road.
Periodical cleaning of public roads by the agencies appointed by the state.
Pollution Control equipments to be installed at set points at strategic
locations between mining areas and unloading point.
Regulatory fees to regulate the mechanism as stated above to be recovered
from the mining lease holders.
Ground water preservation : Utilization of ground water by the mining
lessee in the lease area, for washing of ore, or for any other purpose
including its drawl for excavation in cases where working of mines in terms of
Environmental Clearance has gone below the ground water level to be fully
regulated, controlled and monitored.
Dump Handling Policy: For Effective Regulation of Dump and Stock
Yards
The tailings or dumps contain iron ore mined from the mining site after the
recovery of marketable quality of ore by more or less effective recovery
methods; the dumps still contain unrecovered iron ore. They are not simply
discarded but kept for re-treatment as and when technology became
available whereby the ore could be recovered economically and, sometimes,
under circumstances where Export of the ore could not take place in times of
economic depression. The dump material can be easily distinguished from
the surface of the ground on which it is situated. Tailings dumps are
enormous in size but despite their size they are distinguishable from the
surface of the land and are capable of being removed without injuring the
land; they are movables and could be treated as and when necessary and
they do not get acceded to the land having been left there for a long period.
Welfare and Social Responsibilities:
To ensure active involvement of various agencies, organization, Institutions,
Industries, etc engaged in mineral development sector in welfare and
socioeconomic development of mineral bearing and its surrounding areas : The State Government will set up a Mineral Advisory Committee comprising
of technical experts and professional Institutions to advise undertaking
welfare and socio-economic development of mineral bearing and its
surrounding areas.
The Mine Leases would be required to provide health care, education,
drinking water safe and hygienic conditions of living and welfare facilities to
the mine workers and their families, as envisaged under the relevant labor
laws.
The mine Leases would be required to set up health facilities specially
equipped to cater to the needs of women and children in and adjoining
mining areas.
The Government shall make all out efforts through its administrative
machineries or otherwise to prevent any type of child labor as envisaged in
the prevalent Acts and Regulation in the country on the subject.
Strong growth in the Indian mining industry
As a result of strong economic growth, the Indian mining industry increased
at a CAGR of 11.1% during the review period (2004-09), to value more than
US$20bn in 2009. Total mineral production grew at a CAGR of 7.6% in the
same period, to reach an estimated 1.1 billion tons in 2009.
During the forecast period (2010-15), the expansion of key end markets such
as construction, infrastructure and power generation will continue to drive
the demand for minerals. As a result, the Indian mining industry is forecast to
produce more than 1.5 billion tons of minerals by 2015, growing at a CAGR of
almost 6% during the forecast period.
Increase in royalty rates will affect company revenue
The Indian Government adopted an increase in mining royalties in August
2009 for minerals such as copper, zinc and lead. For instance, the
government increased royalties on zinc ore from 6.6% to 8%, imposing a
10% value-added royalty on iron ore mining.
For iron ore mining companies, the new royalty will mean switching to a tax
regime under which the companies will be charged based on the market
value of the minerals produced, rather than the existing system of flat rates
based on volumes. The new system is designed to make assessment and
collection simpler and enhance royalty accruals to state governments.
However, the revised rates will also increase production costs for miners,
depending on the value of the mineral.
Coal dominates the Indian mining sector
Coal was India's most valued mineral in 2009, accounting for half of the total
mineral production. Iron ore dominates the metallic mineral category, with its
total production valued at US$4.8bn in 2009.
The non-metallic category is dominated by limestone, with its production
valued at US$0.6bn in 2009, or 2.8% of the total Indian mineral production.
While coal accounts for more than half of all Indian mining activity, iron ore
dominates the metallic mineral category, accounting for four-fifths of this
category's mining activity. Limestone accounts for three-quarters of Indian
non-metallic mineral production.
Government policy for FDI
Foreign Direct Investment Policy
India possesses great potential of mineral resources. However, there exists
considerable scope for augmenting the resource position by further
exploration of known deposits and discoveries of new deposits, adopting
state-of-the-art technology and modern methods like aerial reconnaissance
or geophysical surveys.
The geological and metallogenic history of India is similar to mineral rich
Australia, South Africa, South America, and Antarctica , all of which formed a
continuous landmass prior to the breaking up of Gondwanaland. It also has
some features similar to the mineral rich Canadian shield of North America.
Being aware of the vast potential of the sector, the Indian Government, has
been consistently and in a pragmatic manner opening up the previously
controlled regime to usher private investment in the sector and infuse funds,
technology and managerial expertise. The opening up of the Indian mining
sector has, therefore, generated considerable global interest. The Indian
mining sector was opened up to Foreign Direct Investment in 1993 after the
announcement of the New Mineral Policy.
Initially, all proposals were
considered on a case to case basis by the Foreign Investment Promotion
Board (FIPB). FDI policy in the mining sector was further liberalized in January
1997 which opened up an automatic approval route for investments
involving foreign equity participation up to 50% in mining projects, and up to
74% in services incidental to mining.
The Foreign Direct Investment (FDI) policy in the mining sector has been
gradually liberalized over the last few years.
FDI cap for exploration and
mining of diamonds and precious stones have been increased to 100% under
the automatic route with effect from 10th February, 2006.
With this, the Foreign Direct Investment in the mining sector for all nonatomic and non-fuel minerals have now been fully opened up to 100%
through the automatic route including diamonds and precious stones.
Relief & Rehabilitation of Displaced and Affected Persons
Mining operations often involve acquisition of land held by individuals
including those belonging to the weaker sections. In all such cases a social
assessment
will
be
undertaken
to
ensure
that
suitable
Relief
and
Rehabilitation packages are evolved. While compensation is generally paid to
the owner for his acquired land, rehabilitation of affected persons in the form
of substitute land, land for housing and jobs is not always adequate.
In areas in which minerals occur and which are inhabited by tribal
communities and weaker sections it is imperative to recognize resettlement
and rehabilitation issues as intrinsic to the development process of the
affected zone. Thus all measures proposed to be taken will be formulated
with the active participation of the affected persons, rather than externally
imposed.
A careful assessment of the economic, environmental and social impact on
the affected persons will be made. A mechanism will be evolved which would
actually improve the living standards of the affected population and ensure
for them a sustainable income above the poverty line. For this purpose, all
the provisions of the National Rehabilitation and Resettlement Policy or any
revised Policy or Statute that may come into operation, will be followed.
Penal Liability
It is very necessary to introduce penal liability for illegal mining as the
instances of illegal mining are increasing day by day. Everyone should be
punished for not following the provisions of the mining. It is very necessary
for the development of the country.
