A.

Laws in Relation to Coal Mining in India

1. The Coal Mines (Special Provisions) Act, 2015 Introduced in 2015 allocation of coal mines
and vesting of the right, title and interest in
and over the land and mine infrastructure
together with mining leases to successful
bidders and allottees.
2. The Coal Bearing Areas (Acquisition and It allows the Indian government to acquire
Development Act), 1957 land that contains or is likely to contain coal
deposits, primarily for the purpose of coal
mining by government companies. It
applies to government company only.
3. Mines and Minerals (Development & Regulation) It regulates and develops mines and
Act 1957 minerals under the control of the Union
Government.
4. Mineral Laws (Amendment) Act, 2020 It amendment certain Minerals
(Development and Regulation) Act, 1957
(MMDR Act) and the Coal Mines (Special
Provisions) Act, 2015 (CMSP Act) to boost
commercial mining in India.
5. The Mines and Minerals (Development and It removed the restriction on the end-use
Regulation) Amendment Bill, 2021. of minerals from captive mines for private
players. Earlier the coal mines were
allowed to private companies only for the
captive use however, this restriction was
removed.

Section 4(1) of the Principal Act has been

amended with the objective of allowing
private entities (notified by the Central
Government) with enhanced technology to
undertake mineral exploration activities.

Section 8B in the Principal Act has been

substituted by way of the Amendment Act
and it has been clarified that all valid rights,
approvals, clearances, licences, etc. 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
the lease and such rights, approvals,
clearances, licences, etc. shall be
transferred to, and shall vest (subject to the
relevant conditions) in the successful
bidder of the mining lease selected through
auction.

1. Procedure for granting of prospective license and composite license and grant of coal mines under
Mines and Mineral Act, 1957:
(a) Prospecting Licence
– Definition: Under the Act’s definitions (see Section 3), a prospecting licence is
granted for undertaking prospecting operations—that is, for exploring and proving the
existence of mineral deposits.
Section 4 of the Act talks about prospecting or mining to be done under license or lease only
it lays down : Under this section no prospecting, reconnaissance, or mining operation may
be undertaken without a valid licence (such as a prospecting licence, exploration licence, or
mining lease) issued under the Act. While this applies universally, the Act explicitly allows
private companies to be notified by the Central Government—alongside government
agencies—to conduct these operations, provided they meet the prescribed conditions. This
means that if a private company is duly notified and obtains the requisite licence, it may
legally carry out mining activities, including adhering to strict rules for transportation and
storage of minerals, just like any other sanctioned entity.
(b) Related Instruments: In addition to the prospecting licence, the Act provides for other
instruments such as the reconnaissance permit, exploration licence (especially for minerals
listed in the Seventh Schedule), and composite licence (which is a prospecting license cum
mining lease).

(c) Composite License

– This license allows for a two‐stage process: first, the prospecting (or exploration) phase
and, if successful, a subsequent mining lease is granted seamlessly. The provision is provided
under Section 11 A of the Mines and Mineral Act, 1957.
[11A. Granting of 1 [mineral concession] 4 [or 5 [composite licence] in respect of coal or
lignite].—(1) Notwithstanding anything contained in this Act, the Central Government may,
for the purpose of granting [mineral concession] or [composite licence] in respect of coal or
lignite] select any of the following companies through auction by competitive bidding, on
such terms and conditions as may be prescribed, namely: — (a) a Government company or
corporation or a joint venture company formed by such company or corporation or between
the Central Government or the State Government, as the case may be, or any other company
incorporated in India; or
(b) a company or a joint venture company formed by two or more companies,[to carry on
coal or lignite reconnaissance or prospecting or mining operations, for own consumption,
sale or for any other purpose as may be determined by the Central Government;]
[Provided that the auction by competitive bidding under this section shall not be applicable
to coal or lignite—
(a) Where such area is considered for allotment to a Government
company or corporation or a joint venture company formed by such company or corporation
or between the Central Government or the State Government, as the case may be, for own
consumption, sale or for any other purpose as may be determined by the Central
Government;
(b) Where such area is considered for allotment to a company or corporation
that has been awarded a power project on the basis of competitive bid for tariff (including
Ultra Mega Power Projects);]

Explanation.—For the purposes of this section, “company” means a company as defined in

clause (20) of section 2 of the Companies Act, 2013 (18 of 2013).]
 Therefore, the explanation to Section 11A makes it crystal clear that composite license
can be granted to private companies also.
 Under the said act Section 5 of the Act provides that mineral concession would only be
given to following persons/entity by the state government:
i. (a) is an Indian national, or company as defined in 10[clause (20) of section 2
of the Companies Act, 2013 (18 of 2013)]; and {Note: Foreign Companies
cannot obtain license or lease with respect to mining however they can
invest upto 100% in such companies.}
ii. [Provided further that the previous approval of the Central Government shall
not be required for grant of [mineral concession] in respect of the minerals
specified in Part A of the First Schedule, where,— (i) an allocation order has
been issued by the Central Government under section 11A;
iii. (iii) a vesting order or an allotment order has been issued by the Central
Government under the provisions of the Coal Mines (Special Provisions) Act,
2015 (11 of 2015).]
 Both coal and ignite is mentioned in the FIRST SCHEDULE PART A of the Act.

Procedure for Allotment of Prospecting License-cum- Mining Lease (PL-cum-ML) in State of Telangana 1
In accordance with the MM(D&R) Amendment Act, 2015, the allotment of a Prospecting License-cum-
Mining Lease (PL-cum-ML) is conducted exclusively through an online e-auction process that begins with
the State Government’s detailed survey of a designated area using electronic total stations and DGPS to
demarcate precise boundary coordinates, prepare accurate maps, and classify land types. Once the area
is identified, mineral resources are estimated up to the G3 level following the Minerals (Evidence of
Mineral Content) Rules, 2015, and eligible applicants—who must be Indian nationals or companies as

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Document Attached in the Email.
defined under the Mines & Minerals (Development & Regulation) Act, 1957—are invited to participate
in a two-round e-auction. In the first round, bidders submit technical bids that include documentary
evidence of eligibility, bid security, and an initial price offer based on a percentage of the mineral’s
value, with only those meeting or exceeding the reserve price advancing. The highest initial bid then sets
the floor price for the second round, where qualified bidders submit final price offers until the highest
offer is determined, declaring the preferred bidder. Following this, the successful bidder must furnish
performance security and complete prospecting operations within a defined period (ranging from three
to five years), apply for a Mining Lease based on proven mineral evidence, and enter into a Mine
Development & Production Agreement that entails further payments and enhanced security measures.
Additionally, any newly discovered or minor minerals post-auction are subject to separate regulatory
provisions, ensuring that the entire process is transparent, competitive, and compliant with established
statutory guidelines.

Q. What mining rights may private parties acquire? How are these acquired? What obligations does the
rights holder have? If exploration or reconnaissance licences are granted, does such tenure give the holder
an automatic or preferential right to acquire a mining licence? What are the requirements to convert to a
mining licence2?
A private party can obtain a non-exclusive reconnaissance permits (NREP) mining lease or a composite
licence (prospecting licence-cum-mining lease).
Prior to the MMDR Amendment Act, a prospecting licence separate from the mining lease could also
granted but now this has been subsumed under the composite licence.
Currently, mining leases and composite licences are only granted through a competitive bidding process. A
composite licence holder has the right to move from prospecting to mining; however, a NREP holder is not
entitled to a preferential claim for grant of a composite licence or mining lease. For those rights holders who
had been granted reconnaissance or prospecting licences under the old regime prior to the MMDR
Amendment Act, a right to obtain prospecting cum mining lease or mining lease, as the case may be,
continues to exist.
Obligations of the rights holder include:
 obtaining all necessary permits and consents;
 operating the mine in accordance with the mining plan;
 commencing mining operations within two years of execution of mining lease;
 payment of royalty, dead rent, surface rate or other fees;
 keeping accurate accounts of minerals mined, waste material excavated, employees and all mining
plans;
 allowing inspections by the authority;
 restoring the land, to the extent possible, affected by prospecting or mining activity; and
 payment of compensation for all damages, injury or disturbances caused in exercise of its rights.

Q. What types of surface rights may mining rights holders request and acquire? How are these rights
acquired? Can surface rights holders oppose these requests?
A mining rights holder is required to obtain surface rights over the area or obtain the consent of the owner
to start prospecting or mining operations.
In relation to government-owned land, the selected bidder is granted surface rights by the government
authorities. During prospecting, the approval of the government authority, such as the deputy collector,
needs to be taken to clear vegetation in order to construct drains or use any water in that land. The rights
holder is liable to pay surface rent, water cess for the surface area used by him or her for the purposes of
mining operations. The mining lease holder must prior to using any land for new surface operations give
written notice to the government authority, which has a right to raise objections and restrict the rights
holder’s use of the surface.
When private owners grant prospecting licences or mining leases the land owners may grant surface rights
to such third parties according to the terms of their agreement.
Further, the government exercising the power of eminent domain can acquire land for public purposes such
as mining under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and
Resettlement Act 2013 (LARR Act). However, this is subject to consent requirements from the surface rights
holders and such acquisitions can be opposed.

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Mining Rights and Title in India: https://www.lexology.com/library/detail.aspx?g=987cf697-db33-49f8-a47a-5aaa8e79a475