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"Mines and Mineral Development & Regulation (MMDR) Act, 1957 and
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“Mines and Mineral Development and Regulation
(MMDR) Act, 1957 and Subsequent Amendments "

 

“ Mines and Mineral Development and Regulation (MMDR) Act, 1957 and
subsequent Amendments "

Anand Bhardwaj1

1Manager,MECON Limited, Ranchi - 834 002, India

1.0 Introduction

Minerals constitute the back-bone of economic growth of any nation and India has
been eminently endowed with this gift of na-ture. Mining sector provides basic raw
materials to many important industries like power generation (thermal), iron and
steel, cement, petroleum and electrical & electronics equipment etc. India produces
as many as 88 minerals which includes fuels minerals, atomic minerals, metallic &
non-metallic minerals and 55 minor minerals (including building and other
materials). Also, mining contributes about ~2.7% to the GDP (Gross Domestic
Product) of the national economy. After India became independent, the Five Yearly
Plans formulated thereafter gave mining a very important place for India’s
infrastructure and developmental needs. Being a critical and important industry for
the India’s growth and its ambitious needs, its regulation, development and
administration was very crucial for India. In order to facilitate the same the Govt. of
India brought the Mines and Mineral Development and Regulation (MMDR)
Act, 1957 (67 of 1957) on 28th Dec. 1957.

The MMDR Act, 1957 is a key policy legislation passed by the Parliament, which has
the potential to initiate the transformation in the mining sector and usher in a
period of accelerated growth in the mining sector. A robust mining sector
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experiencing strong growth is crucial for India’s growth in the coming years as it is
the backbone of the manufacturing and infrastructure sector.

The Mines and Minerals (Regulation and Development) Act, 1957, is a mother
Act enacted by the republic of India for regulation and development of minerals and
mining sector in India. This act forms the basic framework of mining regulation in
India. It also provides for framing of various rules by executive action through the
concerned ministries as per Government of India (Allocation of Business) Rules,
1961.

This paper mainly deals with the constitutional provisions, legislative, regulatory
and administrative framework and different statutory provisions of MMDR Act,
1957, its subsequent amendments and rules framed thereunder pertaining to
mineral and mining sector in India.

2.0 Structure Of Minerals And Mining Sector in India

2.1 Constitutional provisions : Mines & Mineral sector

The essence of federalism lies in the sharing of legal sovereignty by the Union and
the federating units. In the federal structure of India, the State Governments are
the owner of minerals located within the boundaries of the State concerned.
Although mineral wealth vests with the State Govt., yet the subject of regulation of
Mines and Minerals development is covered under 7th schedule of Constitution of
India.

The Entry at serial No. 54 of List-I under 7th schedule (union list) states that
‘Regulation of mines and mineral development to the extent to which such
regulation and development under the control of the Union is declared by
Parliament by law to be expedient in the public interest’ shall be within the purview
of the Central Government. In pursuance of this, the Parliament has passed

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legislation titled ‘The Mines & Minerals (Development and Regulation) Act, 1957’ as
Central Act (No. 67 of 1957).

Also, the entry at serial No. 23 of List II (State list) to the Constitution provides
that ‘Regulation of mines and mineral development subject to the provisions of List
I with respect to regulation and development under the control of the Union, are
within the purview of States’. Under this provision, the power to regulate and
legislate with regard to minor minerals has been vested with the respective State
Govts.

In accordance with article 297 of the Constitution, the Central Government is the
owner of the minerals underlying the ocean within the territorial waters or the
Exclusive Economic Zone of India. The Ministry of mines, GoI, administers the
Offshore Areas Mineral (Development and Regulation) Act, 2002 and rules framed
thereunder.

2.2 Power of Legislation, Regulation & Administration

In India, the minerals are classified as minor minerals and major minerals. The
power to frame policy and legislation relating to minor minerals is entirely
delegated to the State Governments under section 15 of MMDR Act, 1957 while
policy and legislation relating to the major minerals is dealt by the Union
Government.
As per the Government of India (Allocation of Business) Rules, 1961 and its
subsequent amendments, the power vested under the different ministries are as
given below.
 Ministry of Mines (MoM), Khan Mantralaya
 Legislation for regulation of mines and development of minerals including
offshore minerals (including atomic minerals)

 Regulation of mines and development of minerals other than coal, lignite,

and sand for stowing and any other mineral declared as prescribed

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substances for the purpose of Atomic Energy Act, 1962 under the control of
Union as declared by law

 MoM is also vested with aforesaid power pertaining to all other metals and
minerals not specifically allotted to any other Ministry/Department, such as,
aluminum, zinc, copper, gold, diamonds, lead and nickel.

 Ministry of Coal, Koyla Mantralaya (coal/lignite)

 Exploration and development of coking and non-coking coal and lignite
deposits in India.
 All matters relating to production, supply, distribution and prices of coal.
 Development and operation of coal Washeries other than those for which the
Department of Steel is responsible.

 Administration of the Coal Mines (Conservation and Development) Act, 1974

(28 of 1974).

 Administration of the Coal Bearing Areas (Acquisition and Development) Act,

1957 (20 of 1957).

 Administration of the Mines and Minerals (Development and Regulation) Act,

1957 (67 of 1957) and other Union Laws in so far the said Act and Laws
relate to coal and lignite and sand for stowing, business incidental to such
administration including questions concerning various States.

 Department of Atomic Energy, as related to Atomic Minerals

 All matters related to Atomic Energy in India i.e.

(a) Administration of the Atomic Energy Act, 1962 (33 of 1962), including
control of radioactive substances and regulation of their possession,
use, disposal and transport;

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(b) Atomic minerals-Survey, prospecting, drilling, development, mining,
acquisition and control;

The State Governments grant the mineral concessions for all the minerals located
within the boundary of the State, under the provisions of the Mines and Minerals
(Development and Regulation) Act, 1957 (MMDR) and Mineral Concession Rules, as
applicable, framed thereunder.

MoM through its attached office, Geological Survey of India (GSI), facilitates
exploration, geological mapping and mineral resource assessment in the country.
Indian Bureau of Mines (IBM), a subordinate office of the MoM is mainly responsible
for regulation of mining in the country.

3.0 The Act : MMDR Act, 1957

`The Mines and Minerals (Regulation and Development) Act, 1957, is an Act of
the Parliament of India enacted to provide for the development and regulation of
mines and minerals under the control of the Union in India. This act forms the basic
framework of mining regulation in India.

3.1 Applicability

It is applicable on all minerals except mineral oil i.e. natural gas and petroleum.
3.2 Major salient features of the act

Grant of mineral concessions: The act permit grant of reconnaissance permit,

prospecting licence, mining lease, composite licence (PL cum ML) or a combination
of any of these.

Prospecting Licence: The license granted for undertaking operation for the purpose
of exploring, locating or proving mineral deposit.

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Reconnaissance operation: Any operations undertaken for preliminary prospecting
of a mineral through regional, aerial, geophysical or geochemical surveys and
geological mapping, but does not include pitting, trenching, drilling (except drilling
of boreholes on a grid specified from time to time by the Central Government) or
sub-surface excavation

Mineral Reserve: The economically mineable part of a measured and indicated

mineral resource.

Leased area: The area specified in the mining lease within which the mining
operations can be undertaken and includes the non-mineralized area required and
approved for the activities falling under the definition of “mine” as per Mines Act,
1952.

Prospecting or mining operations to be under license or lease: As per the section 4

of the Act, no person shall undertake the prospecting or mining operations except
under PL or ML license. However, the Govt. has permitted GSI, IBM, States’ DMGs,
AMDER of DAE, MECL etc., under the second proviso, of the aforesaid section, to
carry out the Prospecting operation without PL as per the terms and conditions
specified by the Govt.

Further, in July, 2015 the Ministry of Mines, vide Gazette notification no. G.S.R
538(E), has also permitted RINL, SAIL, NMDC, KIOCL, MOIL, CMDCL, MPSMCL
under the second proviso of section 4(1) of the Act.

Period of grant of mining concessions: under section 8 of the Act, the period of
mining lease granted for Coal & lignite is maximum 30 years and minimum 20
years. In case of Govt. companies or corporation period for grant shall be as
prescribed by Central Govt.

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Further, as per section 8A, the period for grant of minerals other than coal and
lignite and atomic is 50 years. Also, as per sub-section 11, of section 6 of Atomic
Mineral concession rules, 2016, the mining lease granted for minerals in Part B of
First Schedule i.e. Atomic Minerals shall be for a period until the reserve of such
minerals in mine is exhausted.

Provisions for transfer of statutory clearances: As per section 8B of the Act, all valid
rights, approvals, clearances, licences and the like granted to a lessee in respect of
a mine (other than those granted under the provisions of the Atomic Energy Act,
1962 shall continue to be valid even after expiry or termination of lease

Royalties in respect of mining leases: The holder of a mining lease granted have to
pay royalty in respect mineral removed by him at the rate specified in the Second
Schedule of the Act.

Payment towards DMF and NMET: As per section 9B and 9C the concession holder
have to pay DMF at rate of 30% for old lessee and 10% of royalty for new lessee
(meaning lease granted on or after 12th January 2015) and NMET at rate of 2% of
royalty.

Atomic Minerals (minerals specified under Part B of First Schedule): Section 11B of
the act provides for power of Central Government to make rules for regulating
atomic minerals specified under Part B of First Schedule. The Central govt. under
the aforesaid power has framed Atomic Mineral Concession Rules, 2016 for grant of
mineral concessions.

Power of State Governments to make rules in respect of minor minerals: As per the
section 14 & 15 of the Act, the power concerning regulation and development of
minor mineral are vested with respective State Governments. It also provides for
fixing and collection of rent, royalty, fees, dead rent, fines or other charges and the

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time within which and the manner in which these shall be payable by the State
Govt. for winning minor minerals within the respective State boundaries.

Reservation of areas for purposes of conservation: As per section 17A of the Act,
the Central Government or the State Govt., as applicable, with a view to conserving
any mineral may reserve an area for undertaking prospecting or mining operations
through a Govt. company. A mining lease granted to a Government company as
referred shall pay an amount as specified in the Fifth Schedule.

However, the reservation made under this section shall lapse in case no ML is
granted within a period of 5 years from the date of such reservation, which is
further extendible up to one year.

3.3 Schedule of the act

 First Schedule: It provides for categorisation of minerals in three parts.

Part A: Hydrogen carbon & Energy minerals consisting coal & lignite.
Part B: Atomic Minerals total 12 minerals.
Part C: metallic and non-metallic minerals.

 Second Schedule: It provides for rate of royalty payable by the concession

holders in respect of minerals. As per section 9 of the Act, the royalty cannot be
revised for minimum of three year period.

 Third Schedule: As per section 9A of the Act, the lessee have to pay dead rent as
specified under third Schedule. It is basically the minimum guaranteed amount of
royalty/year payable as per rules or agreement under a mining lease. It is
generally paid when the mine is not in operation due to some unavoidable
reasons.

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 Fourth Schedule: It specifies the four notified minerals namely Bauxite,
Manganese, Limestone and Iron ore.

 Fifth Schedule: It provides for the payment of an additional amount on grant or

extension of mining lease. The payment payable shall in addition to the payment
of royalty, NMET, DMF or any other statutory payments.

 Sixth Schedule: As per section sections 8(5) and 8A(7A) of the Act, the captive
mine concession holders have to pay an additional premium on sale of mineral
upto 50% of the last year production. The additional amount shall be in addition to
royalty or payment to the DMF and NMET or any other statutory payment or
payment specified in the tender document or the auction premium.

3.4 Rules framed under MMDR Act, 1957 and their brief significance

The MMDR Act, 1957 provides for framing of rules under different provisions of the
Act by executive actions through the concerned ministries. The various rules framed
thereunder and their significance regarding regulation & development of minerals
are as follows.

 Mineral Concession Rules, 1960: It has been framed under section 13 of

MMDR Act, 1957 for grant of mineral concessions i.e. PL, CL or ML for
minerals specified under Part A of First Schedule i.e. coal and lignite.

It provides guidelines for preparation and approval of geological report,

mining plan, accreditation for PL, ML, penalty for violation of statutory
provisions etc.

 Atomic Minerals Concession Rules, 2016: It has been made in exercise

of powers conferred by section 11B of MMDR Act, 1957 for grant of
concessions for minerals specified in Part B of first schedule of the Act.

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These rules shall apply only to mineral concessions relating to atomic
minerals having grade equal to or more than the threshold value. For grant
of Mineral concessions relating to atomic minerals where the grade of atomic
mineral contained in the ore is less than the threshold value, the Minerals
(Other than Atomic and Hydrocarbons Energy Minerals) Concession Rules,
2016, is applicable.

It provides guidelines for preparation and approval of mining plan, lapse,

surrender or termination of lease, compensation, payments and parameters
for establishing the existence of mineralization for atomic Minerals etc.

 The Minerals (Other than Atomic and Hydrocarbons Energy Minerals)

Concession Rules, 2016: It has been framed under section 13 of MMDR
Act, 1957 for grant of mineral concessions i.e. PL, CL or ML for minerals
other minerals listed in Part A and Part B of the First Schedule to the Act and
minor minerals.

It provides guidelines for preparation and approval of geological report,

mining plan, accreditation for PL, ML, penalty for violation of statutory
provisions and rights of the various concession holders etc.

 Mineral Conservation and Development Rules, 2017: It has been

framed under section 18 of MMDR Act, 1957 for conservation and
development of minerals except the mineral oils, coal and lignite, sand for
stowing and minor minerals.

It provides that the powers and responsibilities under the aforesaid rules to
be exercised by the Central Government or the Indian Bureau of Mines (IBM)
in respect of minerals other than minor minerals. For minor minerals the
same shall be exercisable by the State Government or State Directorate of
Mining and Geology. It provides guidelines for preparation of mining scheme,

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modification, submission of various reports, intimation and notice for opening
and operation of mines etc.

 Mineral (Auction) Rules, 2015: It has been framed under section 13 of

MMDR Act, 1957 for auction of minerals except minor minerals and minerals
specified under Part A (Coal and lignite) & Part B (atomic minerals) of first
schedule of the Act.
It provides for grant of mineral concessions through auction, eligibility, pre-
requisite for auction, bidding process, various payments, obligation of lessee
etc.

 Minerals (Evidence of Mineral Contents) Rules, 2015: It has been

framed under section 13 of MMDR Act, 1957 for auction of minerals of
minerals except minor minerals and minerals specified under Part A (Coal
and lignite), sand for stowing & Part B (atomic minerals) of First Schedule of
the Act.

It provides for establishing evidence for existence of mineral content for

grant of mining concessions. Its codes and framework are mainly based on
United Nations Framework Classification (UNFC) version 1997 and Committee
for Mineral Reserves International Reporting Standards (CRIRSCO).

 Coal Blocks Allocation Rules, 2017: It has been framed under section 13
of MMDR Act, 1957 for allotment (allocation & auction) of coal blocks.

It provides for allocation/auction process, eligibility, process, procedure for

declaration of successful bidders, appeals etc.

 Colliery Control Rules, 2004: It has been framed under sub section (1)
and (2) of section 18 of MMDR Act, 1957 for categorisation of coal,

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submission of return by lessee, power of coal controller for quality
surveillance, regulation & disposal of coal stocks, inspect collieries etc.

4.0 Major Amendments

The economic liberalization era of 1991 and onwards gave birth to a separate
National Mineral Policy 1993, laying down the path for private sector in exploration
and mining. The underlying situation prompted the Govt. to amend the MMDR Act
to deliver a fair and transparent concession regime to invite private sector
investment, including FDI, into exploration and mining. The series of amendments
in the MMDR Act over several decades have given it a new connotation, scale and
purpose.
For instance, the MMDR Amendment Act, 2015, substituted the first-come-first-
served/discretionary process for grant of mineral resources by a transparent and
competitive auction process, enabling the States to find a greater share of the value
of mineral resources. The amendment also ensured certainty of tenure and easy
transferability of mineral concession. Besides, the major issues was as follows.

 Before 2015, grant of mineral resources was through ‘first-come-first-serve’

method which was discretionary and decision making was not transparent,
which leads to the Coalgate scam in 2014 and cancellation of allocation of coal
blocks by Hon’ble Supreme Court.

 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.

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

The above issues prompted the government to amend the MMDR Act, 1957. The
salient features and brief summary of the major amendment are given below.

4.1 MMDR Amendment Act, 1999

The amendment provides for the followings:

 The grant of Reconnaissance Permit along with PL and ML licence was

introduced

 Provision for approval of mining plan before grant of ML was made

 Provision towards grant of Mineral concession in relation to any area which is

not compact or contiguous was made

 Inserted new section 23C which granted power to State Govt. to make rules
for preventing illegal mining, transportation and storage of minerals.

4.2 MMDR Amendment Act, 2008

The amendment allowed the State Government to grant a prospecting licence or

mining lease for coal and lignite to private companies through auction by
competitive bidding. The companies that can bid should be engaged in production
of iron and steel, general of power and washing of coal obtained from mines.

Also, certain areas are exempted from the auction. These includes (a) areas which
are considered for allocation to a government company, and (b) areas which is
considered for allocation to a company that has got a power project on the basis of
competitive bids for tariff.

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4.3 MMDR Amendment Act, 2015

The MMDR Amendment Act, 2015 seeks to introduce a more predictable and clear
regulatory and policy environment for the mining sector, so as to do away with
delays and improve transparency in allocation of mineral resources.

The amendment focuses on attracting private investment and leveraging the latest
technology so as to enable expeditious and optimum development of mineral
resources of the country. It brings clarity on licensing terms, auctions and transfer
of concessions. The most significant provision of the Bill is the introduction of
competitive bidding process for granting new mining leases. The salient provisions
of the Amendment Bill are as follows:

 Introduction of category specified as ‘Notified Minerals’ under the

Fourth Schedule : The Amendment adds a new schedule to the MMDR Act,
1957, which includes Bauxite, Iron Ore, Limestone and Manganese Ore. The 4
minerals are defined as notified minerals and their end use is specified by the
Central Government under the newly released mineral auction rules. The end
use restrictions have been done away through the MMDR Amendment Act 2021.

 Removal of discretion: auction to be sole method of allotment: While all

mineral concessions would continue to be granted by the respective State
Governments, the grant of mineral concessions would be through auctions,
thereby bringing in greater transparency and removing discretion. It is also
clearly specified that all mining leases would henceforth be granted for a period
of fifty years as against the thirty years earlier except coal, lignite and atomic
minerals.

 Provision of Composite License i.e. Prospecting Licence-cum-Mining

Lease (PL-cum-ML): Under the existing act, there were 3 kinds of licences that
could be granted: Reconnaissance Permit (RP), Prospecting Licence (PL) and

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Mining Lease (ML). The Amendment creates a new category of mining licence
i.e. the prospecting licence-cum-mining lease (PL-cum-ML) referred to as the
Composite Licence, which is a two stage-concession for the purpose of
undertaking prospecting operations (exploring or proving mineral deposits),
followed by mining operations.

 Removing pendency of applications for renewal: Impetus to the mining

sector: The Amendment Bill, 2015 addresses this issue also and allows
extension of the lease period up to 31st March 2030 for the captive mines and
till 31st March, 2020 for the merchant mines or till the completion of the period
of renewal already granted, if any, whichever is later.

 Establishment of District Mineral Foundation: The Amendment Bill

introduces a mandatory provision to establish a trust, a non-profit body known
as the District Mineral Foundation (DMF) in all districts where mining related
operations take place. The establishment of the DMF has been introduced to
address the concerns of local people in such districts, and work for the interest
and benefit of the locals in mining affected areas.

 Setting up the National Mineral Exploration Trust (NMET): the Amendment

has defined a provision to setup a National Mineral Exploration Trust (NMET)
with the objective of using funds contributed by the holders of a ML or a PL-
cum-ML for carrying out extensive exploration exercises. The contribution shall
not exceed a sum equivalent to two per cent of the royalty rate.

 Simplification of procedures and avoidance of delay and stringent

provisions against illegal mining: All offences under the Act will now be
subject to a maximum punishment of 5 years imprisonment or fine of Rs. 5.00
lakhs per hectare. State Governments are also empowered to set up Special
Courts for speedy trial of offences under the Act.

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4.4 MMDR Amendment Act, 2021

The Mines and Minerals (Development and Regulation) Amendment Act, 2021
amends the followings:

 Removal of restriction on end-use of minerals: The Act empowers the

central government to reserve any mine (other than coal, lignite, and
atomic minerals) to be leased through an auction for a particular end-use
(such as iron ore mine for a steel plant). Such mines are known as captive
mines. The act provides that no mine will be reserved for particular end-
use.

 Sale of minerals by captive mines: The act provides that captive mines
(other than atomic minerals) may sell up to 50% of their annual mineral
production in the open market after meeting their own needs by paying an
additional charges as per Sixth Schedule.

 Auction by the central government in certain cases: Under the Act,

states conduct the auction of mineral concessions (other than coal, lignite,
and atomic minerals). Mineral concessions include mining lease and
prospecting license-cum-mining lease. The amended act empowers the
central government to specify a time period for completion of the auction
process in consultation with the state government. If the state government
is unable to complete the auction process within this period, the auctions
may be conducted by the central government.

 Transfer of statutory clearances: The amended act provides that

transferred statutory clearances will be valid throughout the lease period of
the new lessee.

 Allocation of mines with expired leases: The act adds that mines (other
than coal, lignite, and atomic minerals), whose lease has expired, may be
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allocated to a government company in certain cases. This will be applicable
if the auction process for granting a new lease has not been completed, or
the new lease has been terminated within a year of the auction. The state
government may grant a lease for such a mine to a government company
for a period of up to 10 years or until the selection of a new lessee,
whichever is earlier.

 Rights of certain existing concession holders: In 2015, the Act was

amended to provide that mines will be leased through an auction
process. Existing concession holders and applicants have been provided
with certain rights including: (i) right to obtain prospecting licence or mining
lease to a holder of reconnaissance permit or prospecting licence (issued
before commencement of the 2015 Amendment Act), and (ii) right for grant
of mining lease where the central government had given its approval or
letter of intent was issued by the state government before the
commencement of the 2015 Amendment Act. The act provides that the
right to obtain a prospecting license or a mining lease will lapse on the date
of commencement of the 2021 Amendment Act. Such persons will be
reimbursed for any expenditure incurred towards reconnaissance or
prospecting operations.

 Extension of period of leases to government companies: The Act

provides that the period of mining leases granted to government companies
will be prescribed by the central government. The amended act provides
that the period of mining leases of government companies (other than
leases granted through auction) may be extended on payment of additional
amount as prescribed in the Fifth Schedule.

 Conditions for lapse of mining lease: The Act provides that a mining
lease will lapse if the lessee: (i) is not able to start mining operations within

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two years of the grant of a lease, or (ii) has discontinued mining operations
for a period of two years. However, the lease will not lapse at the end of
this period if a concession is provided by the state government upon an
application by the lessee. The act adds that the threshold period for lapse
of the lease may be extended by the state government only once and up to
one year.

 Non-exclusive reconnaissance permit: The Act provides for a non-

exclusive reconnaissance permit (for minerals other than coal, lignite, and
atomic minerals). Reconnaissance means preliminary prospecting of a
mineral through certain surveys. The act removes the provision for this
permit.

5.0 Proposed MMDR Amendment Act, 2022

The proposed amendments to the Mines and Minerals (Development & Regulation)
Act, 1957 for bringing reforms in mineral sector and MECON’s comments towards
the same are as follows:
Point wise comments to proposed amendments in MMDR Act, 1957

3.1 Calculation of ASP: Removing cascading impact of royalty on

royalty

The proposal of the committee to examine double calculation of royalty and

recommending to remove the cascading impact of royalty on royalty, is a
welcome step. This is very much required for ease of doing business and in
line with Government flagship programme of Aatma Nirbhar Bharat and
attracting private investment in Indian Mining Sector. It has been rightly
noted that reduction in revenue on account of above is likely to be offset
by expansion in mining activity leading to increased royalty due to
additional mining.

3.2 Fixing mineral wise maximum area limit for mineral concessions

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Section 6 of MMDR Act, 1957 and subsequent amendments thereafter,

provides for maximum area limit for mineral concessions by a lessee
mineral wise (or prescribed group of associated minerals) in a particular
state.

The following suggestions are critical and may kindly be looked into.

1. Since the exploration and discovery of new minerals or minerals

deposits are dynamic and continuous process, updating the same,
state-wise and mineral-wise, maximum mineral concession areas for PL
& ML for large number of minerals would be a cumbersome task.
Therefore, to simplify the above process, it is recommended that the
categorisation of the maximum area limit for PL & ML concession
mineral wise and state wise may be restricted just to three or four
categories based on nature of mineral such as strategic, fuel, notified,
atomic or other minerals, so that updating the same is easy, post
discovery of new minerals or new deposits in a particular state.

2. Amendment of section 6: Substitute clause (a), (aa) and (b) in sub-

section (1): in the first proviso of the section, the amendment provides
for (letter of Intent) LOI issued for PL & ML only for auction. Letter of
intent “upon auction” may please be modified to “letter of intent” only.

However, the LOI may also be issued under the nomination/Govt.

dispensation route as being followed for atomic minerals (Uranium,
etc.) under Section B of First Schedule of the Act.

3. The amendment of section 6 (1) provides for removal of provision

pertaining to increase in PL/ML area in the interest of the development
of any mineral or industry. However, the area can be increased by
amending the proposed Seventh Schedule.

However, since as per the aforesaid section, the maximum limit of

PL/ML area is state wise and mineral wise. Amendment in Seventh
Schedule through gazette notification is again a lengthy process.
Further, it is understood that Seventh Schedule will be under Ministry of

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Mines (MoM) control and accordingly, for minerals not under MoM, the
process will become tedious.

Further, 10 Sq. km restriction may have been already exceeded for

some minerals in a particular State, for instance, Uranium mining lease
in Jharkhand, AP, Rajasthan, the aforesaid maximum limit has already
crossed.

In view of above, it is proposed to retain increase in area clause 6(1)

as per earlier prevailing practices of giving approval on case to case
basis on concerned State Government’s request i.e “Provided that if
the Central Government is of the opinion that in the interest of
the development of any mineral or industry, it is necessary so to
do, it may, for reasons to be recorded ·in writing, increase the
aforesaid area limits in respect of prospecting licence or mining
lease, in so far as it pertains to any particular mineral, or to any
specified category of deposits of such mineral, or to any particular
mineral located in any particular area.”

4. Uranium Mining & subsequent Processing requires good amount of area

and maximum 10 Sq. km area for mining concession needs to be
modified since many uranium deposits are in a single state. And, as per
section 5(1) of MMDR Act, 1957, only Govt. Company can obtain CL or
ML in respect of atomic minerals enumerated in Section B of First
Schedule of the act consisting of 12 atomic minerals.

Also, as per the MMDR Amendment Act 2021, the leased area now
includes non-mineralised area required for activities falling under the
definition of “mine”. Hence, adequate maximum area limit for minerals
particularly atomic minerals, for instance, to the tune of 50 Sq. km
for PL and 20 Sq. km, for ML need to be looked into judiciously.

3.3 Dispense with Forest clearance requirement for exploration (RP &
PL)
As per circular no. F. No 5-3/2007-FC, dated 19.08.2010 by MoEF&CC
(Forest division), prospecting of any mineral, done under the prospecting
license granted under MMDR Act, which requires collection/removal of
samples from the forest land, would be a stage between survey &

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investigation and grant of mining lease and as such permission under
Forestry (Conservation) Act, 1980 would be required.

However, in case of coal, lignite and metallic ores – test drilling upto 20
boreholes of maximum 8” dia per 10 sq. km and in case of non-metallic
ore- upto 16 boreholes of maximum 6.6” dia for 10 sq. km for prospecting
exploration or reconnaissance operation without felling of trees, shall not
attract the provisions of the act.

However, to establish the mineral deposits at the level of G1 or G2 stage

as per Mineral (Evidence of Mineral content) Rules, 2015 and UNFC, many
of the mineral lodes or vein deposits requires comparatively more number
of boreholes per sq. km to come at a realistic estimation of mineral
deposits and also, survey and investigation activities such as RP or PL are
of short duration and does not cause any perceptible change in forest land
and bio-diversity thereon.

Therefore, we welcome the proposed recommendation that the provision of

Forest clearance for RP and PL may be dispensed with to enable
acceleration of exploration activities, auction of more blocks and enhance
production.

3.4 Dispense with Central Government’s previous approval before

initiating auction for composite licence.

The MMDR Amendment Act, 2021 mandates that the composite licence
(CL) may be granted at the G4 level of exploration itself removing the
prescribed stage of G3 for the same.

The redundant process of Central Government’s previous approval as per

section 10B (2) before initiating auction of CL should be done away with to
expedite auction of mineral concessions and to secure the raw material
need of the country.

3.5 Omit phrase, ‘after meeting requirement of linked plant’ in case of

sale of 50% mineral from captive sources.

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MMDR Amendment Act, 2021 allows existing captive miners to sell 50% of
the mineral produced including coal in a year after meeting linked end use
plant requirements.

In order to do away with the ambiguities in the Act, the aforesaid proposed
amendment in the section 8(5) and 8A(7A) of MMDR Act, 1957, is a
welcome feature.

3.6 Removal of some minerals from list of atomic minerals and

empower Central government to auction concession for critical
minerals.

The Atomic Energy Act, 1962 & AMCR 2016, provides for definitions for
atomic minerals. The proposed Section D of first Schedule consisting of 8
critical & strategic minerals needs a detailed review and discussion and
should not be ultra vires with the aforesaid act and rules framed
thereunder.

Also, Uranium, Berylium and Thorium bearing minerals are defined as

prescribed substance as per the Atomic Energy Act, 1962 and for which
DAE (Deptt. of Atomic Energy) is also mandated to review.

Insert a new section 11 D:

The aforesaid amendment section provides for only auction, as the sole
route for grant of mineral concessions for mineral specified in proposed
Section D of first Schedule.

However, it is recommended that the aforesaid proposed Section 11D

should have a provision related to grant of mineral concession through
nomination for Govt. companies.

Also, Beach sand minerals may be segregated as atomic and critical/

strategic minerals based on their respective cut-off grade values. The
proposed new Section 11D should exclude minerals which will be
considered finally as atomic minerals.

At the same time adequate regulatory and supervisory checks are required
to restrict misuse of minerals as many might have usable destructive fissile
characteristic in it.

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6.0 References

1. https://www.mines.gov.in/
2. https://coal.nic.in
3. https://www.indiacode.nic.in/
4. The Mines And Minerals (Development And Regulation) Act, 1957
5. The Mineral law Amendment act 2020
6. The Mineral law Amendment act 2021
7. The Mineral Concession Rules, 1960
8. The Atomic Minerals Concession Rules 2016
9. The Minerals (Other than Atomic and Hydrocarbons Energy Minerals) Concession Rules, 2016
10. Mineral Conservation and Development Rules, 2017
11. Mineral (Auction) Rules, 2015
12. Minerals (Evidence of Mineral Contents) Rules, 2015
13. Mines_and_Minerals_Contribution_to_DMF_Rules_2015
14. Coal Blocks Allocation Rules, 2017
15. Colliery Control Rules, 2004
16. The Government of India (Allocation of Business) Rules, 1961

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