Lok Sabha Clears Bill To Amend Mines & Minerals Act; Remove End Use Restrictions Of Minerals

The Bill seeks to amend the Mines and Minerals (Development and Regulation) Act, 1957 and further regulate the mining sector in India by:

• Permitting removal of restriction on end-use of minerals;
• Enabling captive mines to sell up to 50% of their annual mineral production in open markets;
• Easing the process of statutory clearances by allowing its transfer from one lessee to another;
• Allowing private companies to enter mining exploration; etc.

Salient Features

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 for a particular end-use, such as iron ore mine for a steel plant. Such mines are known as captive mines.

The Bill provides that no mine will be reserved for a particular end-use.

Sale of minerals by captive mines

The Bill 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. However, the lessee will have to pay additional charges for mineral sold in the open market.

Auction by Central Government

Under the Act, states conduct auctions for granting mining leases. The Bill provides that where the State Government has not successfully completed auction process within a specified time, the Central Government may take over and conduct such auction.

Transfer of statutory clearances

Presently, upon expiry of mining lease of a particular lessee, fresh auctions are conducted and the statutory clearances issued to previous lessee are transferred to the new lessee for a period of two years. The new lessee is required to obtain fresh clearances within these two years.

The Bill replaces this provision and provides that the transferred statutory clearances will be valid throughout the lease period of the new lessee. This is expected to reduce compliance burden.

Allocation of mines with expired leases

The Bill provides that such mines, whose lease has expired, may be allocated to a Government company in cases where:

• the auction process for granting a new lease has not been completed
• the new lease is terminated within a year of the auction.

Such lease to a Government company shall be valid for a maximum period of 10 years or till selection of new lessee through auction, whichever is earlier.

Inclusion of Private companies

The Bill provides that the words "private entities that may be notified" shall be added to the second proviso to Section 4 of the principal Act which contemplates grant of license for prospecting or mining operations.

Discussion on the Bill

Speaking on the Bill, Union Minister Pralhad Joshi said that the mining sector in India is vr weak. The reason for this, he said, is non-involvement of private companies in this sector. He added that the Bill enables private players having advanced technology to enter exploration and boost the sector.

Whereas many members said that the Bill is a welcome move to augment minerals and mining sector, the same came with certain concerns, listed as follows:

• Schedule VI areas, i.e., Tribal areas of Assam, Meghalaya, Tripura and Mizoram should be excluded from purview of the Bill as the unexplored mine areas are privately held in this region and as per the Supreme Court's Judgment in All Dimasa Students Union v. State, private owners of land are also owners of minerals.
• Most mines are located in forest areas having tribal communities. Thus, if a balanced view is not taken and private companies are allowed to freely operate in these areas, then both tribal communities as well as environment will be adversely affected.
• Mining sector is prone to irregularities and corruption. Thus, there is a need to create a mechanism of checks.
• The District Mineral Funds under the Act are intended to benefit such areas that are degraded due to mining activities. Since the State Governments will have better insight on the problems and requirements of people in such region, the Fund should be managed by States. Permitting the Central Government to direct utilization of the DMF shall not be not be viable in such a scenario.
• One MP should be appointed to oversee the utilisation of the District Mineral Fund. This will ensure transparency and reasonable use of the funds.
• Privatization comes with risks of monopolization and black marketeering. Thus, the Government should design a mechanism to include safeguards.
• Provision empowering Centre to hold mine auctions in case the State fails to hold the same in a stipulated time overarches the spirit of Federalism.

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