पत्र सूचना कार्यालय

Amendments in the Mines and Minerals (Development and Regulation) Act, 1957 (2015-2021)

“Self-reliance is not possible without a strong mining and minerals sector; because minerals and mining are important pillars of our economy.”

- Prime Minister Narendra Modi

 

The Mines and Minerals (Development and Regulation) Act, 1957 regulates the mining sector in India and mandates the requirement for granting leases for mining operations.

1. Background

• Before 2015, grant of mineral resources was through ‘first-come-first-serve’ method which was discretionary and decision making was not transparent.

· Process of renewal of mining leases was acting as an obstacle in attracting large scale investment in the mining sector.

· Allocation of mineral concession was not generating any revenue to the Government other than royalty.

· Slowdown in grant of new concessions and the renewal of existing ones.

• Mining sector started registering a decline in production, affecting the downstream manufacturing sector which depends on the raw material provided by the mining sector.

Starting 2015, the government carried out a series of major reforms in the mining sector:

Ø The Act was comprehensively amended in 2015 to bring several reforms in the mineral sector, notably:

1. Mandating auction of mineral concessions to improve transparency.
2. Establishing District Mineral Foundation and National Mineral Exploration Trust.
3. Stringent penalty for illegal mining.

Ø To remedy the basic structural defects of the mining sector and infuse greater ease of doing business, the Mines and Minerals (Development and Regulation) (MMDR) Amendment Ordinance, 2015 was promulgated on 12^thJanuary 2015, which was replaced by the MMDR Amendment Act, 2015.

• The Act was further amended in the years 2016 and 2020 to allow transfer of leases for non-auctioned captive mines and to deal with the emergent issue of expiry of leases on 31^stMarch 2020, respectively.

• Further, to propel India into a 5-trillion-dollar economy and to double the employment potential in next five years, the Mines and Minerals (Development and Regulation) Amendment Act, 2021 has been enacted.

2. Why Reforms?

• Mining sector directly and indirectly employs about 1.10Crore people and sustains livelihood of about 5.50Crore people.

·  If the employment potential is doubled in a period of next five years, the benefit of the sector could extend to 10 Crore people.

· In Financial Year (FY) 2018-19, it is estimated that mining contributed Rs 4.10 Lakh Crore to India’s GDP.

· The target is to double the contribution of mining to Rs 8.00 Lakh Crore by FY 24-25.

· Aim is to achieve AatmanirbharUSD 5-trillion economy.

3. Salient features of MMDR Amendment Act, 2015

• E-Auction was made mandatory for the grant of mineral concession to ensure transparent method of allotments of mineral wealth.

· Need for renewals and prior approvals was removed for ease of doing business and removing discretions.

· Provided for establishing District Mineral Foundation Trust for the welfare of mining affected areas by using contributions from the mining companies.

· National Mineral Exploration Trust was established for regional and detailed mineral exploration in the country.

• Penal provisions were made more stringent to deter illegal mining activities.Further, provision was made for constitution of special courts by the State Governments for fast-track trial of cases of illegal mining.

4.Salient features of Mineral Laws (Amendment) Act, 2020

MMDR Act, 1957 has been amended through the Mineral Laws (Amendment) Act, 2020 to maintain sustained mineral production in the country. It facilitated seamless transfer of all valid rights, approvals, clearances, licenses, and the like for a period of two years to a new lessee in case of minerals other than coal, lignite, and atomic minerals. It provides for:

1. Advance Action for Auction

To ensure continuity in mining operations, this Act allowed State Governments to auction the mining lease before the expiry.

2. Transfer of the statutory clearances to new bidders

The Amendment Act now provides that approvals, licenses and clearances given to the previous bidder shall be extended to the successful bidder in the auction for two years.

5. Salient Features of MMDR Amendment Act, 2021

1. Revitalize mineral sector by giving immediate boost to mineral production.
2. To promote ease of doing business.
3. Other structural reforms.

(Click here for detailed information on the salient features)

Impact of Various Amendments

6. Impact of 2015 Amendment

• Introduction of e-Auction of mining lease brought transparency and additional revenue to States in the form of premium over and above royalty.
• DMF created in 600 districts for the welfare of the people of mining affected area and with its permanent source of funding is bringing positive changes in the lives of people in the mining affected areas of all the mining states.
• NMET is facilitating faster and focused exploration for accurately quantifying the mining wealth of the country.

7. Implications of 2016 Amendment

• Provided for transfer of captive mining leases granted other than through auction to facilitate legitimate business transactions.
• Amendment also redefined ‘leased area’ to expand its scope.

8. Implications of 2020 Amendment

• Mines which were expired in March 2020 were auctioned in time and seamlessly operationalized. All the valid clearances, approvals etc. were vested with the successful bidders to enable them to start the mining operations in time.

9. Implications of 2021 Amendment

• Removed distinction between captive and merchant mines
  • States will get additional revenue from the sale of mineral by captive miners.
  • It will encourage setting-up of industries around the mines, which are generally located in remote locations.
  • More blocks now available for auction. It will increase revenue to the States in terms of auction premium.
  • Reserves of more than 2600 Million Tonnes (MT) of Iron Ore, 3400 MT of Limestone, 15 MT of Bauxite, 16 MT of gold ore, and 13 MT of manganese ore released for auction. (As on 31.03.2021)
• Substituting “mining operations” with “production and dispatch”will ensure time bound start and continuation of production and dispatch from mines.
• Re-allocation of non-producing blocks of Government companies
  • Fixing a time frame for starting production will result in expediting production by the mines owned by PSUs.
  • This will ensure additional revenue to the State Government.
• Validity and transfer of statutory clearance of expired mines.
  • This will ensure continuity in mining operations and production despite change in lessee.
  • It will obviate repetitive and time-consuming requirement of obtaining clearances which were already granted in respect of such mines.
• Transfer of mineral concession.
  • Lessee who is not interested in mining due to his financial condition or any other reason may transfer his mine to anyone interested in mining.
  • This would enable the lessee to mortgage the mine to banks and financial institutions.
  • Removing restriction in transfer will attract investment and new technology in mining sector
• Boost to exploration of Minerals
  • It will increase the pace of exploration and will bring advance technology in exploration of mineral by giving level playing field for government and private agency.
  • NMET to be made Autonomous body to ramp up exploration by engaging public and private entities.
  • Under seamless prospecting license cum-mining lease, exploration activity is seamlessly integrated with mining.
• Better implementation of DMF
  • More focused spending of DMF fund on people living in directly affected areas and channel funds to national priorities.
  • This will ensure nomination of Members of Parliament in the Governing Council of DMF.
• Auction of mineral concessions by Central Government in case of difficulties faced by State Governments.
  • To prescribe timeline in consultation with State Governments.
  • To ensure continuous supply of minerals, more blocks are required to be brought into auction on a regular basis.
  • Revenue shall accrue to State Governments.
  • It will pave the path for rapid industrialization and infrastructural development.

The mines and minerals sector is a major employer in rural areas and its role as an essential service has been acknowledged time and again. Mining sector has the potential to create a vast number of employment opportunities. Being the source of raw materials for Indian industries and society, mining is crucial for both Aatmanirbhar Bharat as well as for India to become a USD5-trillion economy.

Source: PIB e-booklet on Amendments in the Mines and Minerals.

AG/AKP/PB

(तथ्य सामग्री आईडी: 148580) आगंतुक पटल : 2098

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