The Mines and Minerals Development and Regulation (MMDR) Act of 1957 is a crucial piece of legislation that oversees the mining sector in India. The Act outlines the protocols for obtaining and conferring leases required for diverse mining operations. The Union Cabinet has recently approved a proposal to revise the Second Schedule of this Act to designate the royalty rates for specific minerals, such as potash, emerald, and the platinum group of metals.
Amendment History of MMDR Act
The MMDR Act underwent an amendment in 2015 for ushering a new framework of granting mineral concessions via auction to ensure clarity and fairness in the allocation of the country’s mineral wealth. In order to provide additional momentum to the mineral sector, the Act was amended yet again in 2021. Through these reforms, the Government has significantly encouraged the auction of mineral blocks, augmenting production, enhancing business ease within the country, and increasing the contribution of mineral production to the Gross Domestic Product (GDP).
Reforms Under the MMDR Act
The changes brought under the Act involved amendments in the provisions related to statutory requirements, elimination of end-use restrictions for captive mines, and distinctions between captive and non-captive mines. Also included were transfer by auction of mineral-concessions, National Mineral Exploration Trust (NMET), National Mineral Index(NMI), the inclusion of the private sector and so on.
Exploration and Production Boost
The Ministry of Mines undertook steps to increase exploration of minerals, leading to more blocks being available for auction. Exploration activities have grown not just for traditional minerals like iron ore, bauxite, limestone but also for deep-seated minerals, fertilizer minerals, critical minerals, and imported minerals. In the past 4-5 years, central agencies like the Geological Survey of India and Mineral Exploration Corporation Ltd have conducted exploration and handed the reports to the states.
Mineral Concessions and Their Types
Three categories of mineral concessions exist in India: Reconnaissance Permit (RP), Prospecting License (PL), and Mining Lease (ML). The RP is granted for preliminary prospecting of a mineral through regional, aerial, geophysical or geochemical surveys and geological mapping. The PL is granted for carrying out operations aimed at exploring, locating or proving mineral deposit. The ML is granted for operations intended to win any mineral.
Key Points Related to Amendment Approval
The approval for the amendment would ensure auction of mineral blocks like Glauconite, Potash, Emerald, Platinum Group of Metals, Andalusite, and Molybdenum, decreasing imports of these minerals and saving valuable forex reserves. The Ministry of Mines has proposed reasonable royalty rates to encourage better participation in the auction of mines. A royalty is a fee imposed by local, state, or federal governments on either the amount of minerals produced at a mine or the revenue generated by the minerals sold from a mine.
Regulation of Minerals in India
The ownership of minerals located within the boundary of a particular state lies with the respective State Governments. In contrast, the Central Government owns the minerals underneath the ocean within the territorial waters or the Exclusive Economic Zone of India.
Granting of Mineral Concessions
The State Governments grant mineral concessions for all the minerals located within the state boundary as per the provisions of the Mines and Minerals (Development and Regulation) Act, 1957, and Mineral Concession Rules, 1960. However, the approval of the Central Government is requisite for minerals specified in the First Schedule to the Mines and Minerals (Development and Regulation) Act, 1957.