OVERVIEW OF MINING SECTOR IN INDIA

Author – RAHUL J.P, KLE SOCIETY’S LAW COLLEGE, BANGLORE

ABSTRACT

This article outlines some of the most important legal concerns frequently connected to the discovery and exploitation of mineral resources in India. Each investor who wants to buy mining assets or a stake in a mining project must do due diligence on these matters

This article examines mining investment, the legal framework that applies to mining, various mining laws, mineral ownership in, the various mining tenements that are available, the rights of miners to access land in opposition to landowners’ rights, the imposition of royalties and other taxes by the various levels of government, and the regulations and limitations that apply to foreign investment in India.

INTRODUCTION

In India, which has a large mining industry, the third quarter of 2019 to 2020’s gross value added (GVA) for the nation was 2%. The sector offers the fundamental raw materials needed by the nation’s infrastructure and manufacturing sectors.[1]

Minerals are precious natural resources that serve as essential raw materials for fundamental industries, so the growth of the mining industry is essential for the overall industrial development of a nation. The vast resources of numerous metallic and non-metallic minerals that India is endowed with serve as a foundation for the expansion and advancement of the nation’s mining industry. India is largely self-sufficient in metallic minerals including bauxite, chromites, iron ore, and lignite as well as mineral fuels like coal and lignite. The industry has the potential to significantly impact GDP growth, foreign exchange earnings, and give end-use industries like building, infrastructure, automotive, and electricity, among others, a competitive edge by obtaining essential raw materials at reasonable rates.[2]

India produces 95 minerals which include

1. four fuel related minerals

2. ten metallic minerals

3. 23 non metallic minerals

4. 3 atomic minerals

5. 55 minor minerals

India is one of the top producers of valuable minerals like chromite, iron ore, coal, and bauxite on a global scale.[3]

The mineral production index of mining and quarrying stood at 111.9 in 2021 which is an average of 5% higher than the last year . coal being considered as one of the most important minerals in india followed by lignite, natural gas , petroleum followed by buxite [4]

India’s mining industry is heavily regulated, and in the last five years, the legal system has undergone substantial modifications that have made the regime more transparent and effective

Some of the recent developments in the sector include:

THE MINERAL LAWS (AMENDMENT) ACT 2020

This modifies the Coal Mines (Special Provisions) Act 2015 and the Mines and Minerals (Development and Regulation) Act 1957 (MMDR Act) (CMSPA). The MMDR Act was amended to include, among other things:

provides for the automatic transfer of the previous lessee’s approvals, licences, and clearances to the new lessee for a period of two years following the grant of the new lease allows holders of a non-exclusive reconnaissance permit to apply for other licences and allows State governments to take advance actions for the auction of a mining lease before its expiration.[5]

THE NATIONAL MINERAL POLICY 2019

The National Mineral Policy of 2008 is replaced by this regulation. The policy was introduced with the intention of implementing sustainable mining practises, improving enforcement and transparency. The programme offers chances for the private sector to engage in exploratory activities as well as incentives to draw private investment and cutting-edge technology through rights of first refusal at auction. The strategy also places a focus on e-governance systems’ ability to boost the regulatory process by:

Increase awareness and education campaigns to involve local residents, to augment law enforcement capacities in preventing illegal mining stop value leaks and unlawful mining make it easier to account for mineral ore across the supply chain and prevent illegal mining.[6]

The Mineral Conservation and Development (Amendment) Rules 2018

These regulations are meant to prevent the production of minerals from being impacted by the expiration of current mining leases. According to the regulations, general exploration (G2) must be completed by 1 April 2019 for all mining leases utilised for non-captive purposes and expiring in March 2020 (apart from coal, lignite, and atomic minerals). In order to facilitate a smooth transition upon the expiration of current mining leases, the amendment further specifies deadlines for the execution of exploration plans.

The Mineral (Auction) Amendment Rules, 2017

The auction procedure for key minerals was accelerated by the notification of these guidelines on November 30, 2017. (other than coal, petroleum and natural gas). According to the revised regulations, block allocations must be flexible in the second round rather than waiting until the fourth round as was customary under the previous rules, which led to the annulment of a sizable number of blocks. The net-worth prerequisite for bidders has also been loosened.[7]

Coal Mines (Special Provisions) Act 2015 (CMSPA)

The central government approved the CMSPA’s methodology for the allocation of coal mines by auction and the allocation of coal for sale in an order dated February 27, 2018. The price offered in INR per tonne to be paid to the State government on coal production serves as the bid criteria in the ascending forward auction that the CMSPA envisions. One of the biggest changes to the coal industry since it was nationalised in 1973, this reform allows for the private sector to participate in commercial coal mining.[8]

This is a major part o structure through which Indian mines and minerals are regulated there are several problems today being faced by the authorities they may be listed below

ISSUES AROUND MINING

Scope of state intervention

A new provision to the section 10B(4) and section 11(5) provides the central government with the power to step in and conduct the auction of mineral concessions in respect of mentioned minerals if the state government fails to conduct the same within time period assigned by the central government [9]

The central government is given the power to interfere in the state matters without any specific scope of intervention.

Royalty fixation

The state may be opposed to royalties being fixed by the central government to extend mining lease and to direct the expenditure of district mineral fund this shall create a conflicting opinion between both.[10]

Tribal communities

District mieral foundation is a statutory body set up by the government to work for intrest of people affected by any activity related to mining mainly towards tribal communities the state may dictate the utilization of DMF’S funds which may lead to conflicting interests between state and the center .[11]

Environmental concern

Any activity or over extraction of beyond the mining mining plan will not be considered an illegal in the same way . this may lead to immortal practices or over extraction which shall lead to loss of bio diversity

REFORMS IN SECTOR

Removal of restrictions

The new act abolished difference between captive mines and merchant mines old act restricted the scope of cold captive mines but the new act is flexible .

Transfer

The transfer of statutory clearances is discussed in Section 8(B) of the Mines and Minerals (Development and Regulation) Act, 1957. It indicates that after the mining lease expires, the mine is transferred to a new owner through an auction.This prohibition is lifted by the newly modified law, which also stipulates that statutory allowances and permits will be valid even after the mining lease expires until all reserves that can be mined have been used. The government will then transfer all statutory rights to the winning entrant through an offering.[12]

Allocation

The state government will decide the period of mining leases together with the ongoing mining leases for the government entity and companies. An additional amount needs to be paid if the State government stretches the period of mining lease of government corporation and companies[13]

The expansion of mining lease

According to the 1957 Act, the lease expires from the date of such period if the lessee fails to start the mining activity within 2 years after the lease permit or the operation has been suspended for at least 2 years.The newly replaced clauses specify that if the State government grants a concession following the lessee’s application, the mining lease will not expire at the end of the designated period. The threshold term before a mining lease expires may also be increased by the state government once up to a maximum of one year

CONCLUSION

The Mines and Minerals (Development and Regulation) Amendment Act, 2021 is a step in achieving the nation’s mineral security by rescinding and amending the restrictive practises that were in place under the previous Act, it is obvious from the article. The main goal is to streamline operations for the mining industry and draw in additional investment. By approving mining sites through Environment Impact Assessment, the environmental issues can be addressed. It is necessary to specify the extent of the central government’s involvement in national affairs. To restructure, control, and reinforce the mining industry’s structure, a separate regulatory body must be established.

REFERENCES

MINING LAW IN INDIA BY P.K JAIN AND G.S CHAUHAN
.MINING LAWS AND REGULATIONS IN INDIA BY UNIVERSAL LAW PUBLISHING HOUSE
MINING IN INDIA :LEGAL AND REGULATORY ISSUES BY ROHIT SHARMA AND RAHUL RAJAN

STATUTE

THE MINERAL LAWS (AMENDMENT) ACT 2021
NATIONAL MINERAL POLICY2019
The Mineral (Auction) Amendment Rules, 2017
Coal Mines (Special Provisions) Act 2015 (CMSPA)

ARTICLES / ONLINE SOURCES

[1] makeinindia.com

[2] www.ibef.org

[3]mines.gov.in/

[4] https://economictimes.indiatimes.com/industry/indl-goods/svs/metals-mining/indias-mineral-production-up-5-in-november-2021/articleshow/89020804.cms

[5] https://prsindia.org/billtrack/the-mineral-laws-amendment-bill-2020#:~:text=The%20Mineral%20Laws%20(Amendment)%20Bill%2C%202020%20was%20introduced%20in,promulgated%20on%20January%2010%2C%202020.

[6] https://mines.gov.in/writereaddata/Content/NMP12032019.pdf

[7] http://www.indiaenvironmentportal.org.in/content/449750/the-mineral-auction-amendment-rules-2017/

[8] https://legislative.gov.in/sites/default/files/A2015-11.pdf

[10] https://www.mondaq.com/india/mining/1059778/the-new-mines-and-minerals-development-and-regulation-amendment-act-2021-to-bring-noteworthy-changes

[11] The Mineral Laws (Amendment) Act 2020.s.(10)

[12] The Mineral Laws (Amendment) Act 2020.s.(8b)

[13] The Mineral Laws (Amendment) Act 2020 s.9