UNIVERSITY OF PETROLEUM AND ENERGY STUDIES

DEHRADUN

COLLEGE OF LEGAL STUDIES

Law related to Mining
Assignment

Submitted by:

Submitted to:

Deepika Ranawat

Sir Tobi Thomas

(R450210041)

Faculty of COLS

Sixth Semester
B.A. LLB Sec. A

National Mineral Policy

The Government had approved the new National Mineral Policy, 2008 on 13th March 2008. The
new Policy enunciates measures to streamline and simplify the procedures for grant of mineral
concessions, develop a sustainable framework for optimum utilization of the country's natural
mineral resources for the industrial growth in the country and at the same time improving the life
of people living in the mining areas which are generally located in the backward and tribal
regions of the country.
Apart from these, the National Mineral Policy has enunciated several policy measures that seek
to strengthen the framework/ institutions supporting the Indian Mining sector, which include the
Indian Bureau of Mines, Geological Survey of India and State Directorates of Mining and
Geology. The new Policy spelt out measures to optimize the scientific mining and exploration of
the country's mineral resources. Some of the important measures are enumerated below:
An Act to replace the existing Mines and Minerals (Development and Regulation) Act, 1957 has
been formulated and the draft Act has been posted on website of Ministry of Mines for
comments.
In order to ensure implementation of the non-legislative policy initiatives given in the National
Mineral Policy, 2008, the Ministry of Mines has constituted an Implementation Committee vide
Ministry of Mines Order No.15(1)/2008-MV(Pt) dated 23.06.2009 to oversee the implementation
of the action points arising out of the National Mineral Policy, under chairmanship of the then
Additional Secretary (Mines).

National Mineral Policy (NMP), 1993

In pursuance of the reforms initiated by the Government o f India in July, 1991 in fiscal,
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, and for attracting state-of-art technology in the mineral sector. The
policy stressed 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 pace, and is in consonance with the national policy goals.

Mines and Minerals (Development and Regulation) Bill, 2011 approved

The Union Cabinet has approved the proposal to introduce the Mines and Minerals
(Development and Regulation) Bill (MMDR Bill), 2011, in terms of National Mineral Policy,
2008 in Parliament and also to repeal the existing Mines and Minerals (Development and
Regulation)Act,1957.
The new MMDR Bill, 2011, aims to introduce better legislative environment for attracting
investment
and
technology
into
the
mining
sector
by
the
following:
States may call for applications in notified areas of known mineralization for prospecting based

on technical knowledge, value addition, end-use proposed ore -linkage etc. and to invite financial
bid;
States may grant of direct mining concessions through bidding based on a prospecting report
and feasibility study in notified areas where data of minerals is adequate for the purpose;
State Government may set up a minimum floor price for competitive bidding;
Special provisions for allowing mining of small deposits in cluster, where cooperatives can
apply;
National Mining Regulatory Authority for major minerals - State Governments may set up
similar
Authority
at
State
level
for
minor
minerals;
Imposition of a Central cess and a State cess, and setting up of Mineral Funds at National and
State
Level
for
capacity
creation;
For the purpose of sharing the benefits of mining with persons or families having occupation,
usufruct or traditional rights in mining areas, and for local area infrastructure, creation an amount
equal to royalty in case of mineral other than coal, and 26% of net profits, in the case of coal, has
been proposed to be credited each year to district Level Mineral Foundation;

 Sustainable and scientific mining through provision for a Sustainable Development

Framework;

Consultation with local community before notifying an area for grant of concession, and for
approval
of
Mine
Closure
Plans;
Enhanced penalties for violation of provisions of the Act, including debarment of person

convicted of illegal mining for future grants and termination of all mineral concessions held by
such
person;
and
Establishment of Special Courts at the State level for speedier disposal of the cases of illegal
mining.
The new draft MMDR Act would have financial implications in the creation of an independent
National Mining Tribunal and National Mining Regulatory Authority at the Central Level, and
the expenditure involved in the capacity building of the Indian Bureau of Mines. The funds for
this expenditure are likely to be met from levy of cess at the rate of 2.5% on the basis of
Customs/Excise
Duty.
The new MMDR Act would be implemented immediately after receiving Parliamentary approval
and President's assent, and a date of commencement would be notified separately.
The approval will help in developing the country's mining sector to its full potential so as to put
the nation's mineral resources to best use for national economic growth, and ensure raw materials
security in the long term national interest.

MINERAL POLICY 2015

Mining Policy: Objectives And Parameters
The basic objectives of the Mining Policy for major minerals are as under:

To develop and exploit mineral resources in a scientific and sustainable manner, taking
into account the interest of the State, People and Environment.
To facilitate exploration work for accurate reserve estimation of the mineral deposits.
To review the existing practice of random exploitation of mineral resources and to
regulate the same.
To carry out geological mapping of mineral resources.
To promote necessary linkages between mining and mineral industry.
To regulate investment in mining and generate employment for local population.
To promote research and development activities in major mineral sector.
To ensure establishment of appropriate training facility for human resource development
to meet the man power requirement of the major mineral industry.
To minimize adverse effect of major mineral development on the environment and
ecology through appropriate preventive and control measures.
To ensure conduct of mining operation with due regards to safety and health of all
concerned
To create a database on major mineral resources in the state.
To take steps to promote geo-tourism.
To promote private sector participation in various aspects of mineral development, which
includes exploration, infrastructure building, mining and other mining related activities
and mineral based industries.
To safeguard the rights of all stakeholders including rights of affected population.

Towards Sustainable Mining and Mineral Conservation:Based on the broad objectives of the major mining policy the state shall go for a paradigm shift
to ensure effective regulation and sustainable growth and development of mining in the state.
Directorate of Mines and Geology shall undertake the following measures for promoting
sustainable mining in the state and ensure fair and transparent regulatory regime.

To exploit geological potentials of the state on a scientific basis after due exploration and
prospecting.
Development of a proper inventory of resources and reserves, a mining tenement registry,
preparation of mineral atlas on priority.
State Directorate of Mining and Geology will be strengthened with man power,
equipment and skills.
Mining is closely related to the forest and environment. A suitable framework will be
designed to ensure mining along with suitable measures for restoration of the ecological
balance that had been disturbed so far.
Value addition will be actively encouraged. Value addition will go hand in hand with the
growth of the mineral sector as a stand-alone industrial activity.
The minerals have to be conserved for the future generations.
Suitable infra-structure facilities to be created financed by user fee concept Wastage of
natural resources will be prevented by amalgamating small deposits suitably.
The closure of mines has to be systematically planned and Ecological balance will be
restored including utilization of existing pits for water conservation and harvesting of
crops.
The fair share of revenues collection from minerals will be utilized to improve the
standard of living of those residing in mining areas.
Take steps both regulatory and developmental to ensure zero tolerance to illegal mining
of any kind.
Research and development in minerals will receive prime importance and a
comprehensive institutional framework for R & D and training will be developed.

Pollution And Its Social Impact: Control of Pollution due to transportation and ground water
preservation.

Polluter pays principle will be strictly engaged and applied while targeting the basic
objective of prevention of pollution and in this regard suitable provisions would be
included in the transportation rules including:
Washing of tyres of truck and other vehicles before exiting the mining lease area and
entry on public road.

Periodical cleaning of public roads by the agencies appointed by the state.

Pollution Control equipments to be installed at set points at strategic locations between
mining areas and unloading point.
Regulatory fees to regulate the mechanism as stated above to be recovered from the
mining lease holders.
Ground water preservation : Utilization of ground water by the mining lessee in the lease
area, for washing of ore, or for any other purpose including its drawl for excavation in
cases where working of mines in terms of Environmental Clearance has gone below the
ground water level to be fully regulated, controlled and monitored.

Dump Handling Policy: For Effective Regulation of Dump and Stock Yards
The tailings or dumps contain iron ore mined from the mining site after the recovery of
marketable quality of ore by more or less effective recovery methods; the dumps still contain
unrecovered iron ore. They are not simply discarded but kept for re-treatment as and when
technology became available whereby the ore could be recovered economically and, sometimes,
under circumstances where Export of the ore could not take place in times of economic
depression. The dump material can be easily distinguished from the surface of the ground on
which it is situated. Tailings dumps are enormous in size but despite their size they are
distinguishable from the surface of the land and are capable of being removed without injuring
the land; they are movables and could be treated as and when necessary and they do not get
acceded to the land having been left there for a long period.

Welfare and Social Responsibilities:

To ensure active involvement of various agencies, organization, Institutions, Industries, etc
engaged in mineral development sector in welfare and socioeconomic development of mineral
bearing and its surrounding areas :

The State Government will set up a Mineral Advisory Committee comprising of technical
experts and professional Institutions to advise undertaking welfare and socio-economic
development of mineral bearing and its surrounding areas.

The Mine Leases would be required to provide health care, education, drinking water safe
and hygienic conditions of living and welfare facilities to the mine workers and their
families, as envisaged under the relevant labor laws.

The mine Leases would be required to set up health facilities specially equipped to cater
to the needs of women and children in and adjoining mining areas.
The Government shall make all out efforts through its administrative machineries or
otherwise to prevent any type of child labor as envisaged in the prevalent Acts and
Regulation in the country on the subject.

Economic Growth and Development

India's emergence as a major economic hub has ensured steady growth across the BRIC nation's
mining industry. Using detailed ICD Research we map the surging demand for minerals such as
coal within an increasingly liberalized market.
As a result of strong economic growth, the Indian mining industry increased at a compound
annual growth rate (CAGR) of 11.1% during the 2004-09 period (the review period), to a value
of more than US$20bn in 2009.

During the period of 2010-15 (the forecast period), the expansion of key end markets such as
construction, infrastructure and power generation will continue to drive the demand for minerals.
The mining equipment market is expected to grow from less than US$3bn in 2010 to US$4.5bn
in 2015. The majority of demand will continue to be met by domestic equipment manufacturers,
though the growing market will begin to attract foreign companies.
While coal accounts for more than half of all Indian mining activity, iron ore dominates the
metallic mineral category, accounting for four-fifths of this category's mining activity. Limestone
accounts for three-quarters of Indian non-metallic mineral production.
The Indian government has increasingly liberalized its mining sector to encourage foreign direct
investment (FDI). However, the government recently adopted an increase in mining royalties for
minerals such as copper, zinc and lead.
The new system is designed to make assessment and collection simpler and enhance royalty
accruals to state governments.
Strong growth in the Indian mining industry

As a result of strong economic growth, the Indian mining industry increased at a CAGR of
11.1% during the review period (2004-09), to value more than US$20bn in 2009. Total mineral
production grew at a CAGR of 7.6% in the same period, to reach an estimated 1.1 billion tons in
2009.
During the forecast period (2010-15), the expansion of key end markets such as construction,
infrastructure and power generation will continue to drive the demand for minerals. As a result,
the Indian mining industry is forecast to produce more than 1.5 billion tons of minerals by 2015,
growing at a CAGR of almost 6% during the forecast period.
Increase in royalty rates will affect company revenue
The Indian Government adopted an increase in mining royalties in August 2009 for minerals
such as copper, zinc and lead. For instance, the government increased royalties on zinc ore from
6.6% to 8%, imposing a 10% value-added royalty on iron ore mining.
For iron ore mining companies, the new royalty will mean switching to a tax regime under which
the companies will be charged based on the market value of the minerals produced, rather than
the existing system of flat rates based on volumes. The new system is designed to make
assessment and collection simpler and enhance royalty accruals to state governments. However,
the revised rates will also increase production costs for miners, depending on the value of the
mineral.
Coal dominates the Indian mining sector
Coal was India's most valued mineral in 2009, accounting for half of the total mineral
production. Iron ore dominates the metallic mineral category, with its total production valued at
US$4.8bn in 2009.
The non-metallic category is dominated by limestone, with its production valued at US$0.6bn in
2009, or 2.8% of the total Indian mineral production.
While coal accounts for more than half of all Indian mining activity, iron ore dominates the
metallic mineral category, accounting for four-fifths of this category's mining activity. Limestone
accounts for three-quarters of Indian non-metallic mineral production.

Government policies favor FDI

The Indian mining industry was largely under government control until 1993, when the
government announced a new Mineral Policy opening the mining industry to FDI.

The Foreign Investment Promotion Board was established to consider FDI proposals on an
individual case basis.

In accordance with the new policy, foreign equity is limited to 50% for participation in mining
projects, and limited to 74% for participation in services relating to mining.

The policy was further relaxed in 1997, by allowing an 'automatic approval' route, and again in
2006, by allowing 100% FDI through this route in all metallic and non-metallic ores, with the
exception of titanium.

In particular, captive coal and lignite attracted significant FDI, and are expected to continue to do
so over the forecast period.

Domestic equipment manufacturers will meet a majority of demand

The mining equipment market is expected to grow from less than US$3bn in 2010 to US$4.5bn
in 2015, at a CAGR of 10.0%. The majority of demand will continue to be met by domestic
equipment manufacturers. However, the recent liberalization of the mining sector means it is
likely the upgrade of mining equipment will result in investment opportunities for foreign
equipment manufacturers.