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INTRODUCTION
The Mines and Minerals (Development and Regulation) Act, 1957 was the principal legislation that was enacted with a view to regulate the minerals and mining sector in India. The 1957 act has undergone meticulous amendments in the years 2015, 20160, and 2020 to bring sweeping reforms in the mineral sector with the changing times. To effusively utilize the potential of the mineral sector including coal, resolve long pending issues that have slowed the growth of the mining sector, the Ministry of Coal, Government of India introduced the Mines and Minerals (Development and Regulation) Amendment Bill, 2021 which sought to amend 1957 at. On 28th March 2021, (amendment act, 2021) received assent from the president of India and was published in the Official Gazette by the Government of India.
CHANGES MADE IN THE ACT
1. NO MORE RESTRICTIONS ON END UTILIZATION OF CAPTIVE MINES:
The most notable change introduced by the new Amendment Act, 2021 is the removal of the distinction between the Captive mines and the trader’s mines. Under the old regime of the 1957 Act, companies that acquired any mine (except coal, lignite, and atomic minerals) by auction were allowed to use the product only for "limited use as power generation and steel production "and not for any other purpose. Such mines were known as confiscated mines.
The Amendment Act, 2021 now removes this restriction on the use of mines by such companies. Mining will now be limited to a specific purpose/industry/sector and companies will be allowed to operate coal mines for their own use, sale, or for any other purpose, subject to the central government.
2. TRANSFER OF STATUTORY APPROVALS:
Section 8B of the 1957 Act which dealt with the 'transfer of statutory clearances', provided that the term of the mining lease agreement was terminated, the mines were to be leased to new auctions. On the transfer of such lease, statutory approvals acquired by the anterior lessee were to be transferred to the incipient lessee for a time of two years. The recipient was required to obtain a new permit within two years.
The Amendment Act, 2021 replaces this provision and provides that all statutory approvals and licenses will apply until the depletion of the depots and the expiration or termination of the lease, the government will proceed with the auction and all legal rights will be transferred to the next successful bidder.
3. SALE OF ORES AND MINERALS EXTRACTED FROM CAPTIVE MINES:
Earlier, there was no provision under the 1957 Act, in respect of the sale of minerals extracted from captive mines. However, significant amendments have been made to Section 8 of the Act of 1957 by inserting a new clause in section 8, which provides that captive mines (excluding atomic minerals) can sell up to 50% of their annual mineral product within the open market after meeting demand. But the lessee will have to pay more to the government for minerals sold in the open market.
Some provisions of section 8 of the act have been added which are enumerated below:
The Central Government by notification in the Official Gazette and that the explanations are recorded in the writing, may increase the stated rate (i.e. 50%) of coal or lignite which may be sold by a public company or any corporation.
The sale of coal will not be allowed in coal mines that are distributed to a company or organization empowered on a competitive tax basis (including Ultra Mega Power Projects).
4. ALLOCATION OF MINES, EXTENSION, AND LAPSE OF MINING LEASE:
The recently enacted Amendment Act, 2021 empowers the State Government to determine the duration of mining leases, including existing mining contracts for state-owned companies or companies. It also introduces additional payments in cases where the State Government extends the leasing time to mining companies or state-owned companies.
In lieu of my new auction, at the end of the mining lease, an extension may only be granted to CPSE to pay a certain amount of royalty to the State Government. (Previous: No. This amendment arises as a result of litigation between the National Mineral Development Corporation (“NMDC”) and the Karnataka Govt.)
5. INVOLVEMENT OF CENTRAL GOVERNMENT ON CONDUCTING AUCTION OF MINERALS CONCESSIONS:
Under the 1957 Act, States were empowered to regulate and auction off mineral permits other than coal, lignite, and mineral atoms. The New Amendment Act, 2021 brings significant changes by adding a new provision to section 4 of Section 10B and section 5 of Section 11 of the 1957 Act, which provides that if the State Government fails to conduct a mineral auction in respect of notified minerals or otherwise, in time set by the Central Government in consultation with the State Government, in which case the Central Government will intervene and conduct auctions.
6. DISTRICT MINERAL FOUNDATION:
The District Mineral Foundation ("DMF") first came in the image in 2015, under the Mine and Minerals Development Regulation (Amendment) Act, 2015 ("2015 Amendment Act"). DMF is a non-profit organization established to serve the interests and interests of the people and areas involved in mining-related or mining activities. Vide, the proposed amendment, to the State Governments is tasked with establishing DMFs in all the mining regions of the various countries and determining the construction and operation of DMFs including spending Central Government to regulate the use of DMFs.
7. TRANSFER OF MINERAL CONCESSIONS:
With a new provision of Section 12A (2) (b) of the Constitution, in terms of its provisions, the transfer of a mining lease agreement will no longer involve the payment of any costs. However, it was also clarified that the money paid for the transfer will not be refunded.
In addition, Section 12A (6) of the principal Act, which provided that the transfer of mineral contracts will only be permitted by a pricing permit, has also been repealed. The aim seems to be to remove restrictions on the transfer of mineral permits to non-auction mines to attract new investment and new technologies to the sector.
CONCLUSION
Government amendments are a step towards achieving mineral security in the country. The new legislature, while abolishing the practices set out in the 1957 Act, has dealt with various mining related issues including auction, legal transfer, operation of District Mineral Foundation (DMF) Trustees, etc. job creation, increasing the contribution of the mining sector to national GDP and capturing domestic and foreign investment. It may be worth noting, however, that the new legal system will be able to cope with time and legal reform.
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