Regulatory framework for the exploration and

extraction of mineral resources

Regulatory authorities
The regulatory authorities relevant to mining
Regulatory framework
are:
The MMDR Act sets out the legal framework for the mining sector • State governments: Each State
(other than petroleum and natural gas), along with the following rules government has the power to grant mineral
and regulations: concessions and collect royalties, dead rent
and fees within the State in accordance with
• Mineral Concession Rules 1960 (MC Rules). These rules the provisions of MMDR Act.
outline the framework for, among other things, granting
concessions, rejecting applications, maintaining accounts and the • Ministry of Mines (MoM). The MoM is the
submission of reports to the State governments. primary body responsible for administration
of mining in India. It is responsible for:
• Mineral Conservation and Development Rules 2017 (MCD
 survey and exploration of all minerals
Rules). These rules prescribe the conditions for ensuring that
mining is undertaken on a scientific basis while conserving the (other than coal, natural gases and
environment. petroleum);
 mining and metallurgy of non-ferrous
• Mineral (Auction) Rules 2015 (Auction Rules). These rules metals; and
provide the framework for granting concessions for major  administration of the MMDR Act.
minerals through an online electronic auction process. • Indian Bureau of Mines (IBM). The IBM
is a subordinate office of the MoM and is
• Mines Act. This Act defines the requirements for labour safety mainly responsible for regulating and
and working conditions in mines and contains provisions for the ensuring systematic development of mining
management and conduct of mining operations. in India.
• Mines Rules. These rules lay down the framework for ensuring • Ministry of Coal (MoC). The MoC
the welfare, health and safety of labourers employed in mines. administers the exploration of coal in India
and is responsible for ensuring that
• Mines and Minerals (Contribution to District Mineral exploration activities are carried out in a
Foundation) Rules 2015. These rules specify the amount to be sustainable manner.
paid by a holder of a mining lease or prospecting licence/mining
lease to the relevant District Mineral Foundation. • Ministry of Environment, Forest and
Climate Change (MOEFCC). The MoEFCC
• Coal Block Allocation Rules 2017 (Coal Block Allocation is the agency responsible for the planning
Rules). These rules prescribe the terms and conditions for and implementation of India's environmental
auction by competitive bidding for the allotment of coal blocks.
Mining Law Coal
Year Rules Description
1957 Coal Mines Regulations Act The Central Government makes Regulations to improve the mine safety and introduce
regulating body.
1973 Coal Mines Nationalisation Act Central Government took a decision to nationalize the private coal mines. The nationalization
was done in two phases, the first with the coking coal mines in 1971-72 and then with the
non-coking coal mines in 1973.
1993 Captive Coal Mining Allowed The Coal Mines (Nationalization) Act, 1973 was amended in June 1993 to allow coal mining
by both private and public sector for captive consumption

2000 Coal Mines Nationalisation Allow the Indian companies in the public and private sector to under take exploration of coal
Amendment Bill and lignite resources in India without captive consumption.
2007 New Coal Distribution Policy This policy dispensed with the classification of consumers of coal into ‘core’ and ‘non core’
sectors and instead treated each new consumer on merit.
2012 Auction by Competitive Bidding The Central Government introduced Rules under the Mines & Minerals (Development &
of Coal Mines Rules Regulations) Act, 1957 with an objective to establish procedure for allocation of area
containing coal through auction by competitive bidding.

2013 Coal Regulatory Authority Bill The purpose of regulating and conserving resources in the coal sector and protecting the
interests of consumers of coal and producer of coal.
2015 Coal Mines (Special Provisions) Enabling the government to allocate coal mines through auctions. The law permitted private
Act, 2015 players to mine coal for use in their own cement, steel, power or aluminium plants. Under
the new policy, mines will be auctioned to the firm offering the highest per tonne price.

2017 Coal Mines Regulations Act CMR 2017 has 17 chapters and 260 Regulations on contrary to CMR,1957 which had 16
chapters and 205 regulations. New regulations have been included on topics pertaining: -
Coal bed methane, Deep Hole Blasting, Coal Mine Methane, Contractors, Mechanised open
cast workings, Abandoned mine methane, Heavy Earth Moving Machinery (HEMM) etc.
Certain regulations based on topics like Monthly Return has been excluded.
Mining Law- Current Development
Year Rules Description
2018 The Mineral • The rules require general exploration (G2) to be carried out by 1 April 2019 for all
Conservation and mining leases (other than coal, lignite and atomic minerals) used for non-captive
Development purposes expiring in March 2020.
(Amendment) • The amendment also lays down timelines for the implementation of exploration plans to
ensure seamless transition on the expiry of existing mining leases.
Rules
2019 National Mineral This policy replaces the National Mineral Policy 2008.
Policy • The policy was introduced with the aim to increase transparency and enforcement,
and implement sustainable mining practices.
• The policy includes incentives to attract private investment and state-of-the-art
technology through rights of first refusal at auction and opportunities for the private
sector to take up exploration activities.
• The policy also emphasises strengthening the regulatory mechanism by
incorporating e-governance systems.
2020 The Mineral Laws This amends the Mines and Minerals (Development and Regulation) Act 1957 (MMDR Act)
(Amendment) Act and the Coal Mines (Special Provisions) Act 2015 (CMSPA).
• Enables State governments to take advance actions for the auction of a mining lease
before its expiry;
• Provides for approvals, licences and clearances of the previous lessee to be
automatically transferred to the new lessee for a period of two years from the date
of grant of the new lease; and
• Allows holders of a non-exclusive reconnaissance permit to apply for other licences.
• The amendment removes end-use restrictions on companies producing coal under
the CMSPA.
2021 Mines & Minerals This amends the Mines & Minerals (Development & Regulation) Act, 1957 (Principal Act)
(Development & • The amendment proposes to allow captive miners of both coal and other minerals to
Regulation) sell up to 50 per cent of their production after meeting the requirements of the end-
Amendment Act use plant and on paying additional royalty to the state government.
• Allowing private entities (notified by the Central Government) with enhanced
technology to undertake mineral exploration activities.
• The Amendment Act enables the notified private entities to seek funding from the
NMET.
• The Amendment Act also envisages an extension for a period of one year in cases
where the holder of a mining lease fails to undertake production and dispatch for a
UNFC Exploration Guidelines
G3 (Prospecting) G2 (General Exploration)
1. Geological Surveys: 1. Geological Survey:
i) Mapping on 1:10,000 or larger scale i. Mapping on 1:5000 or larger scale with
ii) Linking of prepared maps with topogrid triangulation points,
iii) Assessment of lithology, structure, ii. Linking of prepared maps with topogrid
surface mineralization, analysis of old iii. Assessment of lithology, structure,
workings etc. mineralization.
2. Geochemical Survey:
2. Geochemical Survey: Geochemical sampling
i. Detailed litho geochemical survey,
rock type wise, soil survey. channel sampling from fresh mineralized
3. Geophysical Survey: Detailed ground rocks exposed by trenching/pitting,
geophysical work, borehole logging. ii. Recording of deleterious
4. Technological: elements and by product elements.
i. Pitting/trenching to explore 3. Geophysical survey:
mineralized zone i. Borehole geophysical survey
ii. Drilling borehole spacing: ii. Special survey for problem
a. coal, gypsum, potash, salt beds solving.
1000 to 2000m, 4. Technological :
b. limestone/dolomite 400 to 500m, i. Systematic pitting / trenching,
c. Iron and manganese 200 to 400m, ii. Drilling Borehole spacing
a. coal/gypsum/rock salt 400 to 1000m,
d. Bauxite 300 to 400m,
b. iron and manganese 100 to 200m,
e. chromite 300m, c. limestone/dolomite/barite 200 to
f. barite 500m, 400m,
g. base metals 200m and d. bauxite / chromite 100 to 300m,
h. gold 100m. e. basemetals 100m and
5. Sampling: litho geochemical from a well known f. gold 50m,
section, pit/trench and core sampling. iii. Sampling: Systematic pit/trench and core
6. Petrographic and mineralogical studies: study sampling
of host rock of the deposits and alteration zone, iv. Bulk sampling, if necessary
determination of phase in which minerals occur v. Collection of geo environmental
parameters.
Guidelines for Detailed Exploration- 2007
• MoC circulate guidelines for conducting detailed exploration of captive coal and
lignite blocks in 2007.
Sr. No Item Guidelines

1 Statutory All the statutory licenses and clearances like prospecting license, forest clearance etc. should be obtained by the
permission and allottee, as per existing laws & statutes before initiating exploration activities.
clearances

2 Exploration In case of block with area 10 sq. km. or less, exploration programme should be designed to complete exploration in
coverage one phase only. Exploration should be carried out up to the bottom most workable seam in the area. Suitable
geophysical surveys such as magnetic, gravity, 2D/3D seismic, electrical, ground penetrating radar survey etc. for
delineation of sub surface structural features of the block should be carried out to minimise exploratory drilling.

3 Borehole spacing Boreholes should be spaced at 400 metre grid pattern. Wherever required additional boreholes should be drilled to
density prove delineate the structure Borehole density (beyond incrop) to be indicated seam wise and should be backed by
statistical analysis of borehole data determining mean, standard deviation, coefficient of variation of thickness, area
and specific gravity and use of geo-statistics may be made to minimize drilling requirement.

4 Coring non coring If drilling is done by both coring and non-coring boreholes, coring boreholes should at least be 40% of total number
drilling of boreholes drilled in the incrop region.

5 Geophysical logging All the non-coring boreholes and at least 80% of the coring boreholes should be geophysically logged. The
geophysical logging probes should include at least density, caliper, resistivity and natural gamma.

6 Borehole core (a) Coal core, recovered from drilling, should be packed in polythene tubes immediately after geological logging
sampling and packed in core boxes with proper labeling for sending to laboratory.
(b) Rest of the borehole cores should be packed in polythene tubes and stored in core boxes with proper labeling of
borehole number and depth still the end of exploration.
Guidelines for Detailed Exploration- 2007
Sr. No Item Guidelines

7 Analysis of coal (a) At least 90% of the coring borehole intersections should be analysed for proximate analysis and GCV determination.
core Coal core analysis should be carried out in Govt./National Accreditation Board for Testing & Calibration Laboratories
(NABL) accredited laboratory. All analyses should be carried out as specified in the relevant Bureau of Indian
Standards (BIS) codes.
(b) Minimum requirement of laboratory analysis are specified below:
• Coal quality for non coking coal Band by band- all seams of all coring boreholes
• Seam overall (proximate / as received and 60% Relative Humidity (RH)-60% of all theintersections for each seam.
• Calorific Value (C.V.) for all seam overall samples
• Ultimate analysis at least one per sq. km.
• Ash Fusion Range (AFR) -3/seam/ block
• Total sulphur – 3/seam/block for low sulphur (up to 1%) and 3/seam/sq.km. for high sulphur.
• Ash analysis at least three per seam/block
• Petrographic test- five samples per seam /block
• Washability test-2 seam composite sample

8 Rock Quality (a) RQD of at least three boreholes per sq. km. shall be determined for all lithounits on the basis of geotechnical
Designation & logging of borehole core samples at site before transportation. Length of all the pieces for each lithounit should be
Physico recorded and presented in the report.
Mechanical Test (b) Physico-mechanical test as required for the specific objective of the exploration. These tests, if required, should be
carried out in any Govt./technical college laboratory.

9 Additional (a) Special studies, like hydrogeological investigations, gassiness studies etc. may be taken up depending on specific
Studies requirement, if any.

10 Survey (a) For topographical survey and borehole survey. the reference baseline should preferably be established connecting
with coal grid coordinates.
(b) Topographical survey should be carried out for contouring at one meter interval on 1:4,000/5.000 scale and all
important surface features such as road, river nala, railway lines, villages, forest areas ete, should be mapped.
(c) Adequate reference pillars should be established along the block boundary to mark the block limit, as allotted by
Ministry of Coal.

11 Geological (a) 90% of total in situ reserve is covered under "proved" category and the balance should be indicated" category as
Report (GR) per ISP.
(b) Classification of reserves its per United Nations Framework Classification.
Modified Indian Standards Procedure (ISP)- 2017
• Coal Council of India (CCI) set-up in 1956 to supervise and guide the
development of the coal resources of the countary.
• CCI set-up committee to drew up the Indian Standard Procedure for Coal Reserve
Estimation (ISP) in 1957 and defined classes of coal in India.
• In 2012, MoC decided switch over from existing UHV based classification to
Gross Calorific Value (GCV) based classification system for grading non-coking
coal.
• In 2013, all exploration agency come up to adopt UNFC for classifying and
reporting reserve/resource.
• Modified ISP 2017, incorporate GCV based classification and formulate guidelines
to accommodate the wide variation of Indian coal deposits in terms of rank,
quality and geological features.
• To correlate geological knowledge of resources estimated in Geological Reports
prepared according to ISP with the UNFC guidelines for fossil energy and mineral
reserves and resources,Revised
Existing following categorization of coal resources is introduced:
Nomenclature
Nomenclature
UNFC Class Code Category of Exploration /
Category Category
for GR Resource Knowledge base
Proved Resource Measured Resource 331 G1 (Detailed)

Indicated Resource Indicated Resource 332 G2 (General)

Inferred Resource Inferred Resource 333 G3 (Prospecting)

Prognosticated Prognosticated G4 (Reconnaissance)
334
Resource* Resource*
Modified Indian Standards Procedure (ISP)- 2017
• As per ISP 2017, litho units will be named as below based on Ash and Moisture
percentage
Item Name of litho For high moisture coal (M% > 2) For low moisture Coal (M% <
unit 2)
Coaly matter Coal Ash +moisture upto 40% Ash up to 35%
Shaly coal Ash+ moisture 40.1 – 55.0% Ash 35.1- 50.0%
Carb shale low Ash+ moisture 55.1 – 65.0% 50.1- 60.0%
Combustible dirt Carb shale high Ash+ moisture 65.1 – 75.0% 60.1- 75.0%
band
Non-combustible Sand stone, shale, Ash+ moisture above 75% (assumed Ash above 75%(assumed value, if
dirt band
Grade Based intercalations
Range ofetc. value,Density
if analysis
fornot available, may be analysis not available, may be
Non Coking Coal Grades and average density

on GCV GCV(kcal/kg) taken)

Reserve Calculation taken)
G1 >7000 1.36
G2 >6700 to ≤7000 1.40 • To determined GCV B.K Mazumdar’s
G3 > 6400 to ≤6700 1.43
formula to be used as per ISP 2017.
G4 >6100 to≤ 6400 1.44
G5 >5800 to≤ 6100 1.47  For High Moisture (>2%) coal
G6 >5500 to≤ 5800 1.50
G7 >5200 to ≤5500 1.53 GCV (Kcal/kg )= 85.6 [100-(1.1A+M)]-60M
G8 >4900to ≤5200 1.56
G9 >4600 to ≤4900 1.58  For Low Moisture (<2%) coal
G10 >4300 to ≤4600 1.61
G11 >4000 to ≤4300 1.65
GCV= [165 xF+136 x (V-0.1A) – 108 X M] /
1.8
G12 >3700 to ≤4000 1.69
G13 >3400 to ≤3700 1.73
G14 >3100 to ≤3400 1.78
G15 >2800 to ≤3100 1.81
G16 >2500 to ≤ 2800 1.84
G17 >2200 to ≤2500 1.87
Ungraded ≤2200 1.90
Modified Indian Standards Procedure (ISP)- 2017
• As per ISP 2017, following analysis to be carried out in the mining block

Parameter Quantity Indian standards

Moisture 100% borehole IS 1350 (part I; 1970)
Ash 100% borehole IS 1350 (part I; 1970)
VM 100% borehole IS 1350 (part I; 1970)
CV 100% borehole IS 1350 (part II; 1970)
10% borehole
Ultimate analysis IS 1351 (1959)
(Minimum 2BH)
10% borehole
HGI IS 4433 (1967)
(Minimum 2BH)
10% borehole
Ash Fusion Temp IS 1355 (1959)
(Minimum 2BH)
10% borehole
Ash Analysis IS 1355 (1959)
(Minimum 2BH)
10% borehole IS 1217 (1978)
Minerals in Ash
(Minimum 2BH) IS 4311 (1967)
IS 9127 (part I; 1992)
10% borehole IS 9127 (part II; 1979)
Coal petrography
(Minimum 2BH) IS 9127 (part III; 1992)
IS 9127 (part V; 1986)
10% borehole IS 437 (1969)
Washability studies
(Minimum 2BH) IS 13810 (1993)