Introduction
Mining serves as a major economic activity in India and has accounted for 2.3% of India’s gross value added (GVA) for the first quarter of 2017-18. The basic raw materials required by several manufacturing and infrastructure industries in the country is provided by this sector.
Globally, India is ranked as one of the leading producers of valuable minerals.The mining sector in India is highly regulated and the legal framework has undergone significant changes whenever the time demanded reforms in the laws the result of which is a more transparent and efficient mechanism.
Historical Background
The job of a miner was hazardous and dangerous. Here, diseases and accidents were too common. But till the dawn of the twentieth century, no government legislation existed to regulate the condition of work in the mining industry in India. This alarmed to enact legislatures and provisions to prevent mining accidents. The first solid proposal for inspection & regulation of mining operations in the country came in 1890 from Lord Cross, Secretary of State for India. In 1893, James Grundy, a retired Inspector of Mines from England was appointed to inspect the mines in India and report accordingly. The process of formulating the Mines Act was set in motion only after 1890. Hence, was James Grundy, given the task of surveying the coal mines. At Grundy’s suggestion regarding standardization, a Committee was appointed. It submitted a report in 1895. Strangely, the Indian Mining Association, even before the investigation commenced, emphatically disapproved of any attempt to interfere with the labour. It was only after Lord Curzon’s advent, that a bill was finally passed in 1901 and the first Mine Act was enacted in India which was applicable to the mines situated in British India. A Bureau of Mines Inspection (later termed ‘Department Of Mines’) was started in Calcutta with one chief inspector and two Inspectors of Mines.‟ In 1919, the Labour Conference in Washington decided to establish the International Labour Organization (ILO). In 1951, Mine Act was applicable. It was only after these developments, that any proper attention was paid to this area throughout India.
Jurisdiction over Minerals and Mines under the Constitution
In the federal structure of India, the State Governments are the owners of minerals located within their respective boundaries. The Central Government is the owner of the minerals underlying the ocean within the territorial waters or the Exclusive Economic Zone of India. https://mines.gov.in/UserView/index?mid=1338
In this context, the entry at serial No. 23 of List II (State, list) to the Constitution of India states, ‘Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union.’
The entry at serial No. 54 of List I (Central list) to the Constitution of India states, ‘Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest.’
In pursuance to the entry at serial No. 54 of List I, the Central Government have framed legislation titled Mines & Minerals (Development and Regulation)(MMDR) Act, 1957 as Central Act No. 67 of 1957.
The State Governments grant the mineral concessions for all the minerals located within the boundary of the State, under the provisions of the MMDR Act, 1957, and Mineral Concession Rules (MCR), 1960 framed thereunder. Under the provisions of the MMDR Act, 1957 and MCR, 1960, prior approval of the Central Government is required in the following cases:
• Granting mineral concessions in respect of minerals specified in the First Schedule to the Mines and Minerals (Development and Regulation) Act, 1957.
• Granting areas under reconnaissance permit prospecting licence and mining lease to a person in excess of limits prescribed under Section 6(1)(a)(a), 6(1)(a) and Section 6(1)(b) respectively of the Act.
• Imposing special condition(s) in mining lease under Rule 27(3), in prospecting licence under Rule 14(3) and in reconnaissance permit under Rule 7(3) of Mineral Concession Rules, 1960 over and above the conditions prescribed in MCR, 1960.
• Granting mineral concession in an area previously reserved by the Government, or previously held under a mineral concession, without first notifying the same by relaxing the provisions of Rule 59(1) of MCR, 1960 under Rule 59(2).
• Revision of any order made by State Government with respect to any mineral except a minor mineral.
• Relaxation of Rules in special cases under Section 31 of the Act, keeping in view the interest of mineral development.
Overview of Policies
National Mineral Policy, 1993
In pursuance of the reforms initiated by the Government of India in July, 1991 in matters of industrial and trade regimes, the National Mineral Policy was announced in March, 1993. The National Mineral Policy recognized the need for encouraging private investment including Foreign Direct Investment (FDI) and for attracting state-of-art technology in the mining sector. The policy stated that the Central Government, in consultation with the State Governments, shall continue to formulate legal measures for the regulation of mines and the development of mineral resources to ensure basic uniformity in mineral administration so that the development of mineral resources keeps rapidly increasing and is in consonance with the national policy goals.
National Mineral Policy, 2008
The new NMP pronounces measures like assured right to next stage mineral concession, transferability of mineral concessions and transparency in allotment of concessions to reduce delays which act as an obstacle in impediments to investment and technology flows in the mining sector in India. The Mining Policy also seeks to develop a Sustainable Development Framework for prime utilisation of the country’s natural mineral resources for the industrial growth in the country and concurrently improving the life of people living in the mining areas, which are generally located in the backward and tribal regions of the country.
National Mineral and Exploration Policy, 2016
The National Mineral Exploration Policy (NMEP) document enounces the strategy and outlines the action plan that the Government will adopt to ensure absolute exploration of country’s mineral resources (non-fuel and non-coal). For successful exploration the bringing together of the best of knowledge and experience, the state-of-the-art technology, highly trained manpower, and also enormous financial resources, on an open, collaborative and inter-disciplinary platform is required. The major portion of the effort is clearly of the public good character.
Overview of Rules and Laws
Oilfields (Regulation and Development) Act, 1948
An Act that provides mechanism for regulation of oilfields and for the development of mineral oil resources. Whereas it is advantageous for public interest to provide for the regulation of oilfields and for the development of mineral oil resources.
Indian Mines Act, 1952
This Act regulates the working conditions of workers of the mining sector and their safety measures. It also supervises regulations for carrying out mining operations and management.
The Mines Rules, 1955
These rules spells out the framework for the basic health examination of persons employed in the mining sector and provides sanitation provisions and welfare facilities for miners and their families.
Coal Bearing Areas (Acquisition and Development) Act, 1957
This Act sets up public control over the coal mining industry and its development by providing for acquisition by the State of unworked land containing or likely to contain coal deposits.
Mines and Minerals (Development and Regulation ) Act, 1957
A dominant legislation for the optimum utilization and regulation of mines and minerals in India. The rules framed by Central Government under MMDR Act are as follows:
Mineral Concession Rules, 1960
Mineral Conservation and Development Rules, 1988
The Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016
Petroleum and Natural Gas Rules 1959
The rules managing the grant of exploration licenses and mining leases in respect of petroleum and natural gas which belongs to Government and for conservation and development thereof.
Mineral Concession Rules, 1960
The Mineral Concession Rules, 1960 sketches the procedures and conditions for acquiring a Prospecting License or Mining Lease. These Rules are not applicable to coal, atomic minerals and minor minerals. The minor minerals are separately notified and they come under the scope of the State Governments.
Atomic Energy Act, 1962
An Act to provide for the development, control and use of atomic energy for the welfare of the people India and for other peaceful purposes and for matters connected therewith.
The Coal Mines (Nationalisation) Act, 1973
This Act regulates the acquisition and transfer of the right, title and interest of the owners in respect of the coal mines specified in the Schedule.
Coal Mines (Conservation and Development) Act, 1974
This Act aims to provide for conservation of coal and development of coal mines and for matters connected therewith or incidental thereto.
Mineral Conservation and Development Rules, 1988 and Mineral Conservation and Development Rules, 2017
As per the provisions of sections 18 of MMDR Act 1957 these rules prescribes guidelines for conservation and development of minerals to ensure scientific management of the mining process.
Coal Mining (Nationalisation) Amendment Act, 1993 (Amended in 1986)
This Act was amended to allow private coal mining for confined utilization for generation of power, washing of coal obtained from a mine and other end users to be notified in addition to the existing provisions by the Government.
Granite Conservation and Development Rules, 1999
These rules presents the role of the coal controller, who is responsible for suspectind and regulating the compliance of the requirements for the colliery owners.
Marble Development and Conservation Rules, 2002
These rules were formulated for systematic prospecting and mining of marble and to provide a uniform framework with regard to scientific exploitation of marble.
Offshore Areas Minerals (Development and Regulation) Act, 2002
This Act regulates the development of mineral resources in offshore areas, including territorial waters, the continental shelf, exclusive economic zones and other Indian maritime zones.
Colliery Control Rules, 2004
These rules specify the role of the coal Controller, who will be responsible for overseeing and regulating the compliance of mandatory requirements for the colliery owners.
Offshore Areas Mineral Concession Rules, 2006
The process for the granting and renewaing the concessions in respect of mineral resources in offshore areas is laid down in these rules.
Mineral (Auction) Rules, 2015
The central government released final rules for mineral auction, which for the first time gives states the freedom to earmark a certain percentage of mines for end use and auction them.
Mineral (Evidence of Mineral Contents) Rules, 2015
The rules that set the procedures to be followed for conducting any exploration to determine the mineral content and to take up the mineral blocks for auction and mineral concessions.
Mines and Minerals (Contribution to District Mineral Foundation) Rules 2015
These rules specify the amount to be paid by a holder of a mining lease or prospecting licence/mining lease to the relevant District Mineral Foundation.
The National Mineral Exploration Trust Rules, 2015
Under Section 9C (1) of MMRD 2015, the Central Government established a Trust, called the National Mineral Exploration Trust, which is a non-profit organisation. The object of the Trust is to use funds accrued to the Trust for the purposes of regional and detailed exploration in such manner as may be prescribed by the Central Government.
Atomic Minerals Concession Rules, 2016
The rules prescribe the procedures for regulating the grant of reconnaissance permits, prospecting licences and mining leases in respect of Atomic minerals and for purposes connected therewith.
Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016
The Ministry of Mines has prepared the rules “The Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016” for the provisions relating to grant and regulation of mineral concessions under the Mines and Minerals (Development and Regulation) Act, 1957.
Coal Block Allocation Rules 2017 (Coal Block Allocation Rules)
The rules prescribe the terms and conditions for auction by competitive bidding for the allotment of coal blocks.
Other Laws Applicable To Mining Industry
Environment Laws
Environment (Protection) Act, 1986
Air (Prevention and Control of Pollution) Act, 1981
Forest (Conservation) Act, 1980
Water (Prevention and Control of Pollution) Act, 1974
Labour Laws
Factories Act, 1948
Industrial Dispute Act, 1947
Workman’s Compensation Act, 1923
Health and Safety Laws
Mines (Rescue) Rules, 1985
Maternity Benefit (Mines) Rules, 1963
Metalliferous Mines Regulations, 1961
The Mines Rules, 1955
The Mines Act, 1952
Recent developments in Mining Sector
The Mineral Conservation and Development (Amendment) Rules 2018
These rules aim to ensure that the mineral production is not affected by the expiry of existing mining leases. The rules require general exploration (G2) to be carried out by 1 April 2019 for all mining leases (other than coal, lignite and atomic minerals) used for non-captive purposes expiring in March 2020. The amendment also lays down timelines for the implementation of exploration plans to ensure seamless transition on the expiry of existing mining leases.
The Mineral (Auction) Amendment Rules 2017
These rules were notified on 30 November 2017 to expedite the auction process for major minerals (other than coal, petroleum and natural gas). The amended rules require flexibility in block allocations in the second round, rather than waiting until the fourth round as was usual under the old rules, which had resulted in a significant number of blocks being annulled. In addition, the net-worth requirement for bidders has also been relaxed.
Coal Mines (Special Provisions) Act 2015 (CMSPA)
In an order dated 27 February 2018, the central government approved the methodology under the CMSPA for allocation of coal mines by auction and allotment of coal for sale. The CMSPA envisages an ascending forward auction where the bid parameters are the price offer in INR per tonne to be paid to the state government on coal production. There will be no restriction on the sale and/or utilisation of coal from coal mines. This is one of the most significant reforms in the coal sector since the nationalisation of the sector in 1973 and has the effect of opening up commercial coal mining to the private sector.
Pro Active and Responsive facilitation by Interactive and Virtuous Environmental Singlewindow Hub (PARIVESH)
PARIVESH is a single-window integrated environmental management system, launched by the Ministry of Environment, Forest and Climate Change as part of the wider “Digital India” governmental initiative. PARIVESH seeks to automate the entire process of submitting and tracking applications for various types of clearances such as environmental, forest, wildlife and coastal regulation zone clearances.
Ban on illegal mining in the State of Goa
In February 2018, the Supreme Court of India set aside second renewals of mining leases granted by the State of Goa that were issued in violation of the applicable law. The Court directed that mining operations in the State shall be resumed only after fresh mining leases (not fresh renewals or other renewals) and fresh environmental clearances were granted keeping in mind the provisions laid down by Mines & Minerals (Development and Regulation) Act 1957.
Further Plans for reforms in Legal and Regulatory Framework
The Ministry Of Mines published a draft of the proposed National Mineral Policy 2018 which provides specific steps to move towards further standardisation of the mining sector in India to help the sector achieve sustainable growth. The overall perspective behind the proposed draft policy is driven by the central government’s flagship policy missions “Make in India” and “Ease of doing business”.
Among other things, the policy assures stimuli in line with international practices including incentives to attract private investment and state-of-the-art technology through financial packages or rights of first refusal at auction. The new policy focuses on boosting exploration activities and permits the private sector to take up exploration activities alongside the general exploration and survey work carried on by government agencies.
