MMDR Act, 1957

Pin It
Whatsapp

27-Jul-2022: Acts and Rules to Ensure Promotion of Scientific Mining

As per the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), the Central Government has been empowered for regulation of mines and development of minerals to the extent provided in the said Act. As per section 18 of the MMDR Act, Central Government is responsible to make rules for conservation and systematic development of minerals in India and for the protection of the environment by preventing or controlling any pollution which may be caused by prospecting or mining operations and for such purposes as necessary. Under this section, the Central Government has framed the Mineral Conservation and Development Rules, 2017.

Under the said Act and the rules framed thereunder, the State Government are empowered to carry out auction of mineral concessions in respect of land in which the minerals vest in the concerned Government. However, previous approval of the Central Government is required in the following cases:

  1. Under section 5(1) of the Act for minerals listed in Part A & B of the first schedule to the Act for grant of mineral concession.
  2. Under section 10B(2) of the Act for auction of Composite Licence (CL) of notified minerals, viz., Iron Ore, Limestone, Manganese and Bauxite.
  3. Under section 17A(2) of the Act for reservation of any area by the State Government in favour of a Government company or corporation owned or controlled by the State Government.

Further, Central Government is empowered to reserve any area not already held under a mineral concession, in favor of a Government company or corporation owned or controlled by the Central Government under Section 17A(1A) of the MMDR Act.

Indian Bureau of Mines (IBM), a subordinate office of Ministry of Mines, is engaged in the promotion of scientific development of mineral resources of the country, conservation of minerals, protection of environment in mines, other than coal, petroleum and natural gas, atomic minerals and minor minerals. It performs regulatory functions with respect to the relevant provisions of MMDR Act and the Mineral Conservation and Development Rules, 2017.

Further, as per notification in Official Gazette vide Resolution No. 31/49/2014 – M. III, dated 3rd November, 2014, IBM is mandated to functions as the National Technical Regulator in respect of the mining sector, and lay down regulations, procedures and systems to guide the State Governments (first tier of regulation); provide technical consultancy services; participate in international collaborative projects in the area of regulation and development of the mineral sector; undertake any such other activity as has become necessary in the light of developments in the field of geology, mining, mineral beneficiation and the environment; etc.

Section 23C of the MMDR Act, 1957 empowers the State Government to make rules for preventing illegal mining, transportation and storage of minerals and for purposes connected therewith. The MMDR Act has stringent punitive provision for combating illegal mining. Provisions have been made for setting up of special courts for purpose of providing speedy trial of offences relating to illegal mining.

9-Aug-2021: Enhancement of Royalty Rate on Minerals

In terms of Section 9(1) of the Mines and Minerals (Development and Regulation) (MMDR) Act 1957, every mining lease holder needs to pay royalty for major minerals removed or consumed as per the royalty rates specified in the Second Schedule of the MMDR Act, 1957. Royalty is collected and retained by the State Governments concerned. Royalty rates were last revised on 01.09.2014.

In order to evaluate the revision of royalty rates and dead rent for minerals (other than coal, lignite, sand for stowing and minor minerals), the Ministry of Mines vide order dated 09.02.2018 had constituted a Study Group consisting of representatives from various State Governments including State Government of Odisha and representatives of Mining Industry /Associations /Federations etc. The State Government of Odisha furnished their comments there on vide letter dated 26.06.2018. The Study Group has submitted its final recommendation on 25.07.2019. In the meanwhile, it has been decided to formulate an index based mechanism by developing a National Mineral Index (NMI) for calculation of various payments as well as determination of statutory payments for future auctions. The proposal  has been approved by the Cabinet on 13.01.2021. Accordingly, Ministry of Mines vide order dated 06.04.2021 has constituted a Committee to develop National Mineral Index (NMI) of individual minerals and examining the issue of double taxation.

28-Jul-2021: Efforts to promote and Conserve Mineral Resources

The Ministry of Mines administers the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act, 1957) which is the Central Act that governs the development and regulation of mines and minerals in terms of the powers vested in the Central Government as per Entry 54 of the Seventh Schedule of the Constitution.

The MMDR Act, 1957 has been amended from time to time to promote and conserve  the mineral resources of the country. Through the amendment in the MMDR Act in year, 2015, it has been made mandatory that the mineral concessions will be granted through transparent and non-discriminatory method of auction to ensure the fair value of mineral resources to States.

Recently, Ministry of Mines has amended MMDR Act, 1957 through the MMDR Amendment Act, 2021 which has been notified on 28.03.2021 for giving boost to mineral production, improving ease of doing business in the country and increasing mineral production. The amended Act, inter-alia, contains following provisions which promote the mineral sector in the country:

  • Simplification of exploration regime - (i) To ensure seamless transition of the concession from exploration to production (ii) Mineral Blocks for Composite Licence can be auctioned at G4 level of exploration instead of G3 level as per the earlier standard. (iii) Mineral Block for surfacial mineral can be auctioned for grant of Mining Lease at G3 level instead of G2 level. (iv) Private entities may be notified under Section 4(1) of the MMDR Act for conducting exploration.
  • National Mineral Exploration Trust shall be a nonprofit autonomous body; the entities notified under Section 4(1) of the MMDR Act are eligible for funding through funds accrued under NMET.

Further, Section 18 of the MMDR Act, 1957 empowers Central Government to frame rules for conservation and systematic development of minerals and for the protection of environment by preventing or controlling any pollution which may be caused by prospecting or mining operations. Accordingly, Mineral Conservation and Development Rules (MCDR), 2017(amended from time to time) were framed. As per Section 5(2) (b) of the MMDR Act 1957, no mining lease can be granted unless there is a mining plan for the development of mineral deposits in the area concerned duly approved by the Central Government or by the State Government. Mining Plan incorporates detailed proposals for systematic and scientific mining, conservation of minerals and protection of environment with respect to the lease area. Indian Bureau of Mines IBM is mandated for approval of Mining Plan, as per the provisions of Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016. As per the provisions of MCDR, 2017, Indian Bureau of Mines carries out periodical inspections of mines to monitor conservation of minerals, systematic and scientific mining and protection of environment in the leasehold areas of minerals other than minor minerals, coal and atomic minerals.

Further, section 4A of MMDR Act 1957 empowers the Central Government after consultation with the State Government to terminate Prospecting Licence or Mining Lease, inter alia, for conservation of mineral resources.

26-Jul-2021: Royalty for Minerals

The rates of royalty on minerals are revised from time to time as per the provisions of  the MMDR Act, 1957.

In order to evaluate the revision of royalty rates and dead rent for minerals (other than  coal, lignite, sand for stowing and minor minerals), the Ministry of Mines vide order dated 09.02.2018 constituted a Study Group consisting of representatives from mineral rich states & representatives of Mining Industry /Associations /Federations. The Study Group has submitted its final recommendation on 25.07.2019. In the meantime, Union Cabinet on 13th January 2021 has approved the proposal of Ministry of Mines to introduce an index based mechanism by developing a National Mineral Index (NMI) for various statutory payments  and others for future auctions. Accordingly, Ministry of Mines vide order dated 06.04.2021 has constituted a committee for developing NMI of individual minerals.