Discover the key provisions of the Mines & Minerals (Development & Regulation) Act, 1957, and Rules 1960, governing mining operations in India, including licensing, concessions, and environmental protection.
THE MINES AND MINERALS (DEVELOPMENT AND REGULATION) ACT, 1957 (MMDR ACT) & MINERAL CONCESSION RULES 1960 (as amended by GSR 717(E) dtd 01.10.2021 )
An Act to provide for the [development and regulation of mines and minerals] under the control of the Union.
Key Definitions:
The expressions, “mine” and “owner”, have the meaning assigned to them in the Mines Act, 1952
“Mine” means any excavation where any operation for the purpose of searching for or obtaining minerals has been or is being carried on and includes –
(i) all borings, bore holes, oil wells and accessory crude conditioning plants, including the pipe conveying mineral oil within the oilfields:
(ii) all shafts, in or adjacent to and belonging to a mine, where in the course of being sunk or not:
(iii) all levels and inclined planes in the course of being driven;
(iv) all opencast workings;
(v) all conveyors or aerial ropeways provided for the bringing into or removal from a mine of minerals or other articles or for the removal of refuse therefrom;
(vi) all adits, livels, planes, machinery works, railways, tramways and sidings in or adjacent to and belonging to a mine;
(vii) all protective works being carried out in or adjacent to a mine;
(viii) all workshop and store situated within the precincts of a mine and the same management and used primarily for the purposes connected with that mine or a number of mines under the same management;
(ix) all power stations, transformer sub-stations converter stations : rectifier stations and accumulator storage stations for supplying electricity solely or mainly for the purpose of working the mine or a number of mines under the same management;
(x) any premises for the time being used for depositing sand or other material for use in a mine or for depositing refuse from a mine or in which any operations in connection with such and refuse or other material is being carried on, being premises exclusively occupied by the owner of the mine:
(xi) any premises in or adjacent to and belonging to a mine or which any process ancillary to the getting, dressing or operation for sale of minerals or of coke is being carried on;
“owner” when used, in relation to a mine, means any person who is the immediate proprietor or lessee or occupier of the mine or of any part thereof and in the case of a mine the business whereof is being carried on by liquidator or receiver, such liquidator or receiver but does not include a person who merely receives a royalty rent or fine from the mine, subject to any lease grant or licence for the working thereof, or is merely the owner of the soil and not interested in the minerals of the mine; but (any contractor or sub-
lessee for the working of a mine or any part thereof shall be subject to this Act in like manner as if he were an owner, but not so as to exempt the owner from any liability;
“minerals” includes all minerals except mineral oils
“composite licence” means the prospecting licence-cum-mining lease which is a two stage concession granted for the purpose of undertaking prospecting operations followed by mining operations in a seamless manner;
“dispatch” means the removal of minerals or mineral products from the leased area and includes the consumption of minerals and mineral products within such leased area;
For the words “reconnaissance permit, prospecting license or mining lease” the words “mineral concession” shall be substituted;
“Reconnaissance operations” means 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;
Section 4: No person shall undertake any reconnaissance, prospecting or mining operations in any area with our complying terms and conditions of Mineral Concession granted.
Section will not applicable to Geological Survey of India, the Indian Bureau of Mines, the Atomic Minerals
Directorate for Exploration and Research, Mineral Exploration Corporation Limited and other entities including private entities that may be notified by central Government.
Section 4A: Termination of prospecting licences or mining leases by Central Govt or State Govt after giving reasonable opportunity to the license holder.
Cases in which license can be terminated:
- In the interest of regulation of mines and mineral development,
- Preservation of natural environment,
- Control of floods, prevention of pollution,
- To avoid danger to public health or communications
- To ensure safety of buildings, monuments or other structures
- For conservation of mineral resources
- For maintaining safety in the mines or for such other purposes
Failure to undertake Production and dispatch for a period of two years after the date of execution of the lease or having commenced mining operations, has discontinued the same for a period of two years, the lease shall lapse on the expiry of the period of two years from the date of execution of the lease or, as the case may be, discontinuance of the mining operations.
If application filed for reasons beyond control before it lapses and SG on being satisfied make an order within 3 months from date of application to extend it further period not exceeding one year (Extension can be granted only once during the entire period of lease)
If again Lease holder fails to undertake operations within extended period, Lease shall lapse.
Section 5: Restrictions on the grant of Mineral Concession unless:
- such person is an Indian national, or company (For individual, only if he is Indian citizen, For firms/AOI, all the members are Indian citizen)
- satisfies such conditions as may be prescribed
No Mineral concession shall be granted except with the previous approval of the Central Government.
Previous approval of the Central Government not required where :
- Allocation order has been issued by Central Govt
- Notification of reservation of area has been issued by CG/SG
- Vesting order/allotment order has been issued by CG under provisions of Coal Mines (Special Provisions) Act 2015
No mining lease shall be granted by the State Government unless it is satisfied that―
- there is evidence to show the existence of mineral contents
- there is a mining plan duly approved by the Central Government, or by the State Government
Section 6:
No person shall acquire in respect of any mineral or prescribed group of associated minerals in a State
| One or more prospecting licences | Covering a total area of more than 25 square kilometres |
| One or more reconnaissance permit | Covering a total area of 10,000 square
Kilometres (area granted under a single reconnaissance permit shall not exceed 5,000 square kilometers) |
| One or more mining leases | Covering a total area of more than 10 square kilometres (CG can increase area also in interest of development of mineral/industry) |
| Mineral Concession | For area which is not compact or contiguous (SG can permit in interest of development of mineral) |
The above provisions aren’t applicable to where mining lease is granted to a Government company or corporation.
The area held under Mineral Concession by a person as a member of a co-operative society, company or other corporation or a HUF or a partner of a firm, shall be deducted from the area referred above so that the sum total of the area held by such person whether as such member or partner, or individually, may not exceed the total area specified.
Section 7 and 8: Maximum Period for which licences may be granted or renewed:
| Reconnaissance permit or prospecting licence | 3 years | SG can renew further by maximum 2 years (if longer period required to complete operations)
No Renewal without approval of CG. |
| Mining leases | 30 years | minimum period shall not be less than 20 years |
In case of Government companies or corporations, the period of mining leases including the existing mining leases, shall be such as may be prescribed by the Central Government
The period of mining leases, other than the mining leases granted through auction, shall be extended on payment of such additional amount as specified in the Fifth Schedule.
Where coal or lignite is used for captive purpose, Lessee may sell 50% of the total coal/lignite produced in a year after meeting the requirement of the end use plant linked with the mine as prescribed by CG.
Section 9: The holder of a mining lease granted shall pay royalty in respect of any mineral removed or consumed from the leased area at the rate specified in second schedule.
Royalty shall not be in respect of any coal consumed by a workman engaged in a colliery provided that such consumption by the workman does not exceed one-third of a tonne per month.
Section 9A: The holder of a mining lease pay to the State Government, every year, dead rent at such rate as specified in Third Schedule. Where the leaseholder becomes liable to pay royalty , he shall pay “Royalty or the dead rent-Whichever is greater”
Section 9B: District Mineral Foundation:
Established as a trust, as a non-profit body by State Govt to work for the interest and benefit of persons, and areas affected.
The Mining lease holder shall, in addition to the royalty, pay to the DMF of the district in which the mining operations are carried on, an amount which is equivalent to such percentage of the royalty paid not exceeding one-third of such royalty, as may be prescribed by the Central Government.
Section 9C: National Mineral Exploration Trust: Established as a trust, as a non-profit body by Central Govt or the purposes of regional and detailed exploration The holder of a mining lease or composite licence shall pay to the Trust 2% of royalty paid.
Section 11A: Granting of Mineral concession or composite licence for coal or lignite:
The CG may select any of the following companies through auction by competitive bidding:
- A Govt company or Corporation or a Joint venture formed by such company or corporation or between CG and SG or any other company incorporated in India (Except where such area is considered for allotment for own consumption, sale or any other purpose as determined by CG) Or
- A company or a joint venture formed by two or more companies (Except where a power project including ultra mega power projects have been awarded).
Section 13: Power of Central Government to make rules in respect of minerals
Section 14: Section 3 to 13 not applicable on minor minerals.
“minor minerals” means building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which CG may notify.
Sand not to be treated as minor mineral if used for purposes of stowing in coal mines (Rule 70)
Section 15: Power of State Governments to make rules and collect funds for DMF in respect of minor minerals
Section 17A: Where the Government company or corporation is desirous of carrying out the prospecting operations or mining operations in a joint venture with other persons, it shall hold more than 74% of the paid up share capital in such joint venture and partner shall be selected through a competitive process.
All such Government companies or corporations whose mining lease has been granted after the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, shall also pay such additional amount as specified in the Fifth Schedule for the mineral produced after the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2021.
Section 18: Duty of the Central Government to take steps for conservation and systematic development of minerals in India and for the protection of environment by preventing or controlling pollution
Section 18A. Power to authorise Geological Survey of India, etc., to make investigation
Section 23C. Power of State Government to make rules for preventing illegal mining, transportation and storage of minerals.
Section 24A. Rights and liabilities of a holder of prospecting licence or mining lease to enter the lands over which such permit, lease or licence had been granted at all times during its currency and carry out operations.
Atleast 7 days’ notice to be given for entering into dwelling house along with consent of occupier.
Compensation as prescribed by SG to be paid to the occupier of the surface of the land granted for any loss or damage which is likely to arise or has arisen from or in consequence of the reconnaissance, mining or prospecting operations.
Section 25: Recovery of certain sums as arrears of land revenue
Any rent, royally, tax, fee or other sum due to the Government may be recovered in the same manner as an arrear of land revenue.
Mineral Concession Rules 1960 as amended by GSR 717(E) dtd 01.10.2021
- Reconnaissance permit
Rule 7: Conditions
- The holder of reconnaissance permit shall progressively relinquish the area granted under the permit: –
(a) After completion of two years, the area shall be reduced to 1000 square kilometers or 50% of the area granted, whichever is less; and
(b) The area would be further relinquished so that the permit holder is left with an area not more than 25 square kilometres at the end of third year.
- Strictly adhere to the minimum expenditure commitment and specific physical targets specified in the order of grant of the permit otherwise permit will be cancelled.
- The permit holder shall make available all data collected by him during the reconnaissance operations to the Geological Survey of India, Indian Bureau of Mines and the State Government after a minimum period of two years of the completion of the period of reconnaissance permit
- No entry in forest land or any private land without obtaining permission
- Submit to the SG a six monthly report of the work done by him and the valuable data collected by him within 3 months of close of period to which it relates.
- Submit to SG a full report of work done and all relevant information acquired within 3 months of the expiry or termination of the permit whichever is earlier.
Rule 7A: Reconnaissance Permit to be executed within 90 days or allowed further period from the date of communicate of SG order
Rule 7B: Security deposit: A sum of twenty rupees in respect of every square kilometre or part thereof.
Refunded to applicant on submission of full report as mentioned above.
Prospective License
Rule 14: Conditions
- Licensee shall not pay a wage less than the minimum wage prescribed by CG/SG under Minimum Wages Act 1948
- Licensee shall observe the provisions of the Mines Act, 1952
- Planting in same area or any other area selected by the CG/SG not less than twice the number of trees destroyed, look after them during subsistence of the licence, restore, to the extent possible, other flora destroyed
- Pay compensation to the occupier of surface of the land, compensation for damage to land
- indemnity to Government against the claim of a third party for any damage, injury or disturbance caused
- restrictions regarding felling of trees on unoccupied and unreserved Government land
Rule 15
- Prospecting Licence to be executed within 90 days or allowed further period from the date of communication of SG order
- Submit to the SG a six monthly report of the work done, stating the number of persons engaged and disclosing in full the geological, geophysical or other valuable data collected , within 3 months of end of period.
- Submit to SG a full report of work done and all relevant information acquired within 3 months of the expiry or termination of licence.
Rule 20: Security deposit: A sum of 2,500 rupees in respect of every square kilometre or part thereof.
Refunded to applicant on submission of full report as mentioned above.
Rule 21B Prospecting Operations and Preparation of Geological Report
The Project proponent shall engage any person, entity notified by CG, Accredited prospecting Agency who/which will submit a half-yearly report and also, a full report on completion of licence to CMPDI and SG
- Mining Leases
Rule 22 Application for grant of mining leases
Applicant shall submit a mining plan duly approved by CG, to the SG to grant mining lease over that area. Mining plan /Modified mining plan approval procedure as per guidelines dated 29.05.2020 attached.
Rule 22B: Mining Plan shall be prepared and submitted for approval within a period of 6 months of preparation of geological report.
If a geological report has been prepared prior to issuance of allocation order/vesting order/reservation notification, period of 6 months will be from date of such order/notification.
Rule 22D: Minimum size of the mining lease: Four hectares
In case of renewal of mining lease, the restrictions of minimum area for grant of mining lease shall not be applicable.
Rule 24A: Renewal of Mining Lease
Application at least 24 months before the date on which the lease is due to expire to SG.
If application is not disposed of by the SG before the date of expiry of the lease, the period of that lease shall be deemed to have been extended by a further period till the State Government passes order or 2 years, whichever is earlier.
Rule 24C: Period of Mining Leases granted to a Govt Company or Corporation :
All mining leases granted on or after commencement of Mineral Concession (Amendment) Rules 2021 shall be for 50 years.
- All subsisting mining leases before commencement of Mineral Concession (Amendment) Rules 2021 shall be deemed to have been granted for 50 years or till 31st March 2030, whichever is later.
- SG upon application made atleast 3 months prior to the expiry of the mining lease, shall extend the period of mining lease for further period of 20 years at a time. (SG has power to condone delay also)
- No extension shall be granted to a Govt company or corporation selected through auction.
- If application is not disposed of by the SG before the date of expiry of the lease, the period of that lease shall be deemed to have been extended till SG passes an order.
Rule 27: Conditions of Mining leases
- The lessee shall report to SG the discovery in the leased area of any mineral not specified in the lease, within sixty days of such discovery.
- if any mineral not specified in the lease is discovered in the leased area, the lessee shall not win and dispose of such mineral unless such mineral is included in the lease or a separate lease is obtained
- if the lease permits the working of more than one mineral in the same area the State Government shall not charge separate dead rent in respect of each mineral
- Lessee shall also pay surface rent, water rate, cess assessable on land
- Commence operations within one year from date of execution of lease
- Shall no carry mining operations at any point within distance of 50 metres from railway line or under any ropeway trestle/station without written permission
- Preference to tribals and displaced persons in matter of employment
- Pay wages not less than prescribed by Minimum wages act 1948
- Comply provisions of Mines Act 1952
- Planting in same area or any other area selected by the CG/SG not less than twice the number of trees destroyed, look after them during subsistence of the licence, restore, to the extent possible, other flora destroyed
- Pay compensation to the occupier of surface of the land, compensation for damage to land
- indemnity to Government against the claim of a third party for any damage, injury or disturbance caused.
Rule 28A: Lapsing
Not commenced mining operations within 2 years from date of execution of lease or having commenced mining operations, has discontinued the same for a period exceeding two years, lessee may apply to SG for revival atleast within 6 months from date of lapse.
Provided lease has not been revived more than twice during entire period of lease.
Rule 29: Approval of final mine closure plan and get certificate in this regard (Detailed procedure attached)
Rule 32: Security Deposit before the execution of deed is Rs.10,000
Rule 38 Amalgamation of two or more adjoining leases permissible by SG with prior approval of CG
Period of amalgamated leases shall be co-terminus with the lease whose period will expire first
Rule 40B Application for Composite Lease (Prospecting licence-cum-mining lease)
Rule 63A State Govt shall dispose of application for grant of permit in following time period if application is complete in all respects.
| Reconnaissance Permit | Within 6 months of receipt of application |
| Prospecting License | Within 9 months of receipt of application |
| Mining Lease | Within 12 months of receipt of application |
Rule 64A The State Government may charge simple interest @24% per annum on any rent, royalty or fee or other sum due (other than revision petition fee) from the sixtieth day of the expiry of the date fixed by that Government for payment.
Rule 64B The Royalty shall be charged on run-of-mine coal or lignite irrespective of its processing within or outside the leased area.
Royalty shall be payable at the time of dispatch from or consumption within the leased area.
“run-of-mine” means the raw, unprocessed or uncrushed material in its natural state obtained after blasting, digging, cutting or scraping from the mineralised zone of a lease area
“dispatch” means the removal of minerals or mineral products from the leased area and includes the consumption of minerals and mineral products within such leased area;
Rule 64D Payment of royalty on minerals on ad valorem basis
Rule 65 Every owner, agent or manager of a mine shall permit students of mining and geological institutions approved by the Central Government to acquire practical training of the mines and plants operated by them and provide all necessary facilities required for the training of such students.
Cases of refusal to provide facilities for practical training by any owner, agent or manager of a mine should be referred to the Controller General, Indian Bureau of Mines.
Rule 66 A permit holder shall furnish every year details of all geophysical data related to operations being carried on, to the Geological Survey Of India
Rule 72 Compensation to Owners of Surface rights etc as notified by SG
- In case of agriculture land, annual compensation will be the average annual net income from the cultivation of similar land for previous three years
- For Non agriculture land, annual compensation will be average annual letting value of similar land for previous three years
Rule 73 Compensation for damages
Assessment of damages by SG within one year from the date of termination of licence or lease, to be paid to occupier of surface land.
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