The Mines and Minerals (Development and Regulation) (MMDR) Amendment Bill, 2021, recently introduced in the Lok Sabha by India’s Coal and Mines Minister, seeks to update the Mines and Minerals (Development and Regulation) Act, 1957. The landmark act, which has regulated the mining sector in India for over 60 years, is set to undergo significant changes designed to streamline operations, increase transparency, and maximise output.
Removal of Restriction on End-Use of Minerals
The new Bill proposes eliminating restrictions on the end-use of mined minerals. In the existing Act, the central government can reserve any mine, excluding those for coal, lignite, and atomic minerals, for a specific end-use. These are known as captive mines. The amendment stipulates no mine will be reserved for a particular end-use.
Sale of Minerals by Captive Mines
The amendment further provides that captive mines may sell up to 50% of their annual mineral production on the open market after meeting their own requirements. This threshold may be increased by the central government via notification. Lessees will be obliged to pay additional charges for minerals sold on the open market.
Auction by Central Government in Certain Cases
The Bill provides the central government with the authority to dictate a specified time period for the completion of the auction process, undertaken in consultation with the state government. If the state government cannot complete the auction within this timeframe, the central government may conduct the auction instead.
Transfer of Statutory Clearances
The Bill ensures that transferred statutory clearances remain valid throughout the lease period of the new lessee. Under current regulation, new lessees must apply for fresh clearances within two years of transfer from the previous lessee.
Allocation of Mines with Expired Leases
The amendment provides for mines with expired leases to be allocated to a government company in certain situations. This provision applies if the auction process for granting a new lease remains incomplete, or the new lease is terminated within a year of auction.
Extension of Leases to Government Companies
The Bill proposes that lease periods for government companies be determined and potentially extended by the central government upon payment of additional amounts specified in the Bill.
Conditions for Lapse of Mining Lease
A mining lease will lapse if the lessee doesn’t commence mining operations within two years of lease grant, or if mining operations are discontinued for two years. Exceptions can be made on application by the lessee.
Removal of Non-Exclusive Reconnaissance Permit
The new Bill abolishes the provision for a non-exclusive reconnaissance permit for preliminary prospecting of a mineral through surveys.
Significance of the Amendment
The MMDR Amendment Bill, 2021 promises greater transparency in the auction process, increased flexibility for miners, simplification of procedures, expedited project implementation, creation of an efficient energy market, and access to high-tech underground mining technologies. It’s anticipated this will enhance India’s mining industry, reduce coal imports, and benefit all stakeholders located in mineral-rich areas.