Mines and Minerals amendment bill 2021

Mines & Minerals (Amendment) Bill 2021

 

Recently, the Lok Sabha has cleared the Mines and Minerals (Development and Regulation) (MMDR) Amendment Bill, 2021.

The Bill amends the Mines and Minerals (Development and Regulation) Act, 1957, which regulates the mining sector in India.

Key Points

The MMDR Act, 1957: The mines and minerals sector is governed by the Mines and Minerals Act of 1957. This act provides for:

the administration of mining leases throughout the nation. the rationale behind the lease’s grant.

How to make sure the residents of the areas where mines have been auctioned off are safe. India’s mineral potential is comparable to that of Australia and South Africa. India produces ninety-five different kinds of minerals, but the country’s mining industry is still relatively unexplored.

In Australia and South Africa, for example, the mining industry accounts for 7–7.5% of GDP, while in India it accounts for just 1.75 percent.

Excessive Mineral Imports: India imports minerals valued at approximately 2.5 lac crore rupees. India’s Underexplored Mining Areas: Of its Obvious Geological Potential (OGP), only 10% has been examined thus far.

Only 5% of OGP is being used by India for mining.

◆ in Australia and South Africa, 70-80% of OGP is mined.

MMDR Amendment Bill, 2021

Objectives:

Transparency in the Auction Process: The purpose of the law, which was approved by voice vote, which is an oral response to a question, is to increase the transparency of the mine auction procedures.
Enhancing Employment: The amendment’s main goal is to increase employment in the mining industry and the industry’s share of the nation’s GDP.

According to the Ministry of Mines, the changes will result in an increase in direct and indirect employment of roughly 55 lakh.
be Attracting international and Domestic Investment: With this amendment, the government is attempting to draw in international and domestic investment for the mining industry, as well as involvement from the sale of efficient technology.

also, the government has permitted 100% FDI under automatic route for sale of coal, for coal mining activities including associated processing infrastructure.

Mines and Minerals

India is one of the top mining destinations in the world because of its abundance of mineral resources. The nation is home to a wide variety of minerals, such as limestone, iron ore, coal, bauxite, and copper. These resources are essential to the operation of many economic sectors, including heavy industries, building, and infrastructure development.

India’s mining sector is important because it is the world’s second-largest producer of coal and third-largest producer of steel. Furthermore, India possesses significant reserves of strategic minerals such as uranium and thorium, which are vital for nuclear power generation and energy security.

To fully utilize India’s mineral resources, however, issues like environmental deterioration, illicit mining, and regulatory barriers still exist. As a result, sustainable mining methods and strong governance frameworks are required.

Increasing the Contribution of Mining to GDP: The objective is to enhance the contribution of the mining sector in the GDP to up to at least 2.75% which at present is around 1.75%.

Proposed Amendments:

Removal of the distinction of Captive and Non-captive Mines: The MMDR Act, 1957 empowers the central government to reserve any mine as captive mine which is utilised for a specific purpose only.

The bill removes the distinction between captive and non-captive mines. The mines will not be limited to just a specific purpose/industry/sector. Ores and Minerals Extracted from Captive Mines: Earlier, the ores extracted from captive mines were only used by captive industries.

The bill allows the leaseholders of captive mines to sell upto 50% of their ore into the open market. • There is one caveat; additional charges will have to be paid to the government by the lessing for selling minerals in the open market

The 50% cap is flexible, the government can go above the cap if necessary.
Statutory Permission Transfer: According to the bill, all clearances and licenses will be passed to the next highest bidder if the lease expires or is terminated, and they will remain in effect until the reserves have been mined.

Obtaining new clearances within the two-year timeframe was challenging for the new lessee under the previous regime, therefore this will aid in luring investors.

Central Government Involvement: The main objective behind the bill is to keep a mine operational even if the lease has expired and the state government is unable to hold an auction. In such a scenario, the central government may hold the auction.

Removal of Non-Exclusive License Regime: In the act, companies have a non-exclusive license for the reconnaissance of the area to find out mineral potential.

The amendment removes the non exclusive license permit. Extension of Mining Leases to Government Companies: There are also provisions in the bill which

allow the government to extend mining leases to government companies for a period of ten years. The

idea is to ensure the utilisation of mine is more efficient. The state governments will be provided additional royalty payments for extending leases to the

Central Public Sector Enterprises (CPSES). District Mineral Foundation: It is a trust set up as a non-profit body, in the districts affected by the mining works, to work for the benefit of affected people and areas. It is funded through the contributions from miners.

The bill provides that the central government can also direct how the money should be spent for the

development of the area.

Challenges Associated

Concerning the environment: The act’s revisions liberate India’s mining industry, which is good for the nation’s growth. In terms of the environment, mining is detrimental. Numerous tribal communities, as well as the Particularly Vulnerable Tribai Groups (PVTGS),

tumbling into the mining areas. An increase in mining is another threat to their habitation. Another significant problem is their compensation and rehabilitation.

Intervention of the Federal Government in State Affairs: State governments hold the authority during a mine auction. When two distinct political parties control both the federal and state governments, there may be uncertainty.

The state governments may object to the foxing of the royalties for extensions of leases to the government companies as this may lead to lower revenues as compared to a transparent process of auction. Moreover, the involvement of the central government in directing the expenditure of district mineral funds is also a matter of concern for the states.

Way Forward

Promoting Reforms in the Mining Sector: The mining sector’s reforms will accelerate the expansion of other industries that rely on it. Numerous metal and related sectors will grow as a result of the mining production surge. Numerous industries, including the auto industry, will gain from this as well.

Minimizing Imports: India imports a lot of raw resources in spite of its enormous potential.
In order to fulfill the notion of self-reliant India, mining is one important aspect to take care of.

Carrently many industries including steel, copper, etc import a large amount of raw materials and intermediaries. Introducing an Independent Regulatory Body: The ambiguity among the different ruling parties at state and central level should not be allowed to hamper the growth of the mining sector.

 

Therefore, the need is to have an independent regulating authority which should be given power to work in the larger interest of public & economic growth.

Its purpose is to make sure that no particular side is favoured and utilisation of resources for holistic benefit of the country is maximised.

cooperation between the federal government and state governments: To the greatest advantage of the mining sector, the federal government and state governments should collaborate to ensure that mining uses increasingly sophisticated technologies and draws in increasing amounts of investment. This will make mining profitable for those who work in the industry and for those who live nearby, creating more jobs locally.

Managing Environmental Concerns: To guarantee that mining is environmentally friendly, all tiers of government should collaborate. Mining projects should be approved following an evaluation of their environmental impact.

Seismic studies and taking the Biodiversity into account. To Promote Exports and Employment: Mineral is a bulky cargo and in order to become an exporter of minerals, India needs to improve its infrastructure in terms of railway racks, port capacities and shipping facilities.

India should focus on generating employment too. The sector has huge potential for job creation at local level which can counter the migration and thus prevent cities from getting overburdened.

Constitutional Provision Related to Mining

The entry at serial No. 23 of List II (State List) to the Constitution of India mandates the state government to own the minerals located within their boundaries.

In accordance with the Mines & Minerals (Development and Regulation) (MMDR) Act of 1957, which was framed, the central government is required to possess the minerals within the exclusive economic zone (EEZ) by virtue of the entry at serial No. 54 of List I (Central List).

All minerals that are collected from the sea or ocean floor in Indian maritime zones, including territorial waters, continental shells, and exclusive economic zones, belong to the central government.