The Mining Sector

  • September 27, 2022
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
No Comments

 

 

The Mining Sector

Subject : Economy

Context Centre has proposed to amend the Mines and Mineral (Development and Regulation) Act, 1957 to put a ceiling on mineral-wise and State-wise area limits for each State.

Details:

  • All states will have to follow the area limits for various minerals while auctioning resources, and changes would require permission from the Centre.
  • Depending on the kind of mineral mined States can set aside 25-400sq km of Perspective license (PL)  and 0-25 sq km for Mining Lease (ML)
  • The limits are based on the reactions of a committee led by the Director General of Geological Survey of India with experts from Indian Bureau of Mines
Minerals PL area limit-sq kmML area limit-sq km
Bauxite,gold& associated mineral 5020
limestone1025
dimond40010
Iron ore (Odisha)5020
Iron ore (other States)2510
Atomic minerals and others-coal, chromite, manganese2510
  • Aim:
    • Smaller mining areas would attract more investors
    • Increase competition- by preventing vast tracts of land irregularly ending up with a few miners

Concept–the Mining Sector

Mining process

  • Government first identifies large areas of probable mining reserves and offer them to companies for initial testing
  • Once the probable resource is established PL is given where licensees get to do more exploration to establish possible mineral resource
  • It then applies for ML for a particular area to extract the resource.
  • Centre is responsible for:
    • survey and exploration of all minerals, other than natural gases, petroleum and atomic minerals,
    • for mining and metallurgy of non-ferrous metals like aluminium, copper, zinc, lead, gold, nickel, etc. and
    • for administration of the Mines and Minerals (Regulation and Development) Act, 1957 in respect of all mines and minerals other than coal, natural gas and petroleum.
  • Indian Bureau of Mines, 1948:
    • It is under the Ministry of Mines with responsibilities for conservation and systematic exploitation of mineral resources other than coal, petroleum and natural gas, atomic minerals and minor minerals.
    • IBM performs regulatory functions under Mines and Minerals (Development and Regulation) Act, 1957
  • Geological Survey of India:
    • It is the largest and most comprehensive provider of basic earth science information or database for all minerals except Uranium .

Mines and Minerals (Development and Regulation) Act, 1957

  • It regulates the overall mining sector in India and specifies the requirement for obtaining and granting mining leases.
    • “Minerals” includes all minerals except mineral oils- natural gas and petroleum.
  • As per Section 6 of the MMDR Act, the maximum area limit is 10,000 sq km for reconnaissance permit (RP), 25 sq km for PL and 10 sq km for ML.
    • It allows the Centre to increase these limits.
  • A person could acquire 1 mining lease for a maximum area of 10 sq km and Center can permit >1 lease.
  • A mining lease can be granted for a minimum of 20 to a max of 30 years and could be renewed for a period not exceeding 20 years.
  • In India, the minerals are classified as minor minerals and major minerals under MMDRA, 1957.
    •  Classification is not related to quantum/ availability/ level of production/ mechanization/ EXIM of these minerals but related to relative value and end use of these minerals.
Minor Minerals

  •  “Minor Minerals” means building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other Central Govt notified mineral.
  • The Center has the power to notify “minor minerals” under MMDR Act, 1957. India has 86 minor minerals out of which 31 were added in 2015.
  • The power to frame law for minor minerals is entirely delegated to State Govts. Thus, the administrative and regulatory jurisdiction of minor minerals falls under State govts.
  • Andhra Pradesh tops in the value of minor minerals produced in India followed by Gujarat, Maharashtra, Rajasthan and UP.
Major Minerals

  • Major minerals are those specified in the first schedule appended in the MMDR Act 1957 and the common major minerals are Lignite, Coal, Uranium, iron ore, gold etc.
  • There is no official definition for “major minerals” in the MMDR Act. Hence, whatever is not declared as a “minor mineral” may be treated as a major mineral.
  • The power to frame law for major minerals is dealt with by the Ministry of Mines under Center.
  • MMDRA (Amendment) Act, 2015
    • States can grant licenses to bidders for all minerals except Coal / Lignite. They can allow licenses to be transferred by the winner to others. They conduct actual auctions via competitive bidding.
    • The Center shall prescribe the terms and conditions, and procedure for auction, including parameters for the selection of bidders.
    • Center may reserve particular mines for a specific end use and allow only eligible end users.
    • Earlier license granted for 30 years but now 50 years. Previously 10 sq km area for licensee but now union can increase size too.
    • Two new organizations created: National Mineral Exploration Trust, District Mineral Foundation.
      • D.M.F to solve public grievance redressal, safeguard rights of public or tribals.
      • DMF funds shall be used to implement PM KhanjiKshetra Kalyan yojana.
    • Special courts can be set up to curb illegal mining.
    • The Bill creates a new category of mining license i.e. the prospecting license-cum-mining lease.
      • The state govt shall grant prospecting license-cum-mining leases for both notified and other minerals.
      • Prospecting license-cum-mining lease for notified minerals (like bauxite, iron ore, limestone and manganese ore) shall be granted with the approval of the Centre.
      • The holder of this licence may transfer the lease to any eligible person, with the approval of the state govt.
  • The Act has been further amended in 2021.
    • The reforms made are in the provisions related to statutory requirements, removal of end-use restrictions for captive mines and the division between captive and non-captive mines, transfer by auction of mineral-concessions, National Mineral Exploration Trust (NMET), National Mineral Index(NMI), the inclusion of private sector, and so on.

What are Mineral Concessions?

There are three kinds of mineral concessions, viz Reconnaissance Permit (RP), Prospecting License (PL) and Mining Lease (ML).

  • RP is granted for preliminary prospecting of a mineral through regional, aerial, geophysical or geochemical surveys and geological mapping.
  • PL is granted for undertaking operations for the purpose of exploring, locating or proving mineral deposit.
  • ML is granted for undertaking operations for winning any mineral.
economy The Mining Sector