Analysis of Mines & Minerals (Development & Regulation) Amendment Act, 2021

Changes in Mines and Minerals (Development and Regulation) Act, 1957 vide Mines & Minerals (Development & Regulation) Amendment Act, 2021

Primary Sector – Mines & Minerals Industry

Facts of Mining Industry –

1. Contributes less than 2% of India’s GDP.

2. Import of Minerals nearly INR 2.5 trillion per annum.

3. Barely 10% of Obvious Geological Potential (OGP) stands explored by India.

4. Out of OGP, merely 5% has been for mining purposes.

Dissection of Changes in Mines & Minerals (Development & Regulation) Amendment Act, 2021 –

1. Elimination of differential treatment between the captive and merchant mines: Auction of mines in future without restriction of captive use of minerals as well as sale by the existing captive mines including captive coal mines of up to fifty per cent of the minerals produced after meeting the requirement of the linked end use plants. Although, the lessee will have to pay additional charges for the minerals sold in the open market to the state government. (Earlier: Captive miners were only allowed to use coal & other minerals extracted for their own industrial use).

2. Extension of Mining Leases to Central Public Sector Enterprises (“CPSE”): Instead of fresh auction of mine, at the time of expiry of mining lease period, extension can be granted only to CPSE on the payment of the specific amount of royalty to the State Government. (Earlier: It was not allowed. This amendment arises in view of litigation between National Mineral Development Corporation (“NMDC”) and Karnataka Govt.)

3. No need to take licenses again by the successful bidder: All the valid rights, approvals, clearances, licences, and the like granted to a lessee regarding a mine shall remain valid even post expiry or termination of lease and that such authorisations shall be transferred and conferred to the successful bidder of the mining lease. (Earlier: Successful bidders need to take all approvals & licenses within 2 years after the allotment of mining lease).

4. Empowering Central Govt – The new amendment now empowers the Central Government to notify the area and conduct auction in cases where the State Governments face difficulty or fail in notifying the areas and conducting auction.