Promotion of Mining Sector

Promotion of Mining Sector
            The Geological Survey of India (GSI), an attached office of the Ministry of Mines, carries out regional and detailed mineral exploration programs for both energy and non-energy mineral categories, for establishing mineral resources in the country. Details of the programmes, state-wise and mineral-wise, taken up by GSI during the last three years (Field Seasons 2012-13, 2013-14 & 2014-15) and current year (Field Season 2015-16) are given in Annex-I.

            Mineral Exploration Corporation Limited (MECL), a PSU under the Ministry of Mines carries out detailed mineral exploration under a promotional scheme on behalf of the Ministry. The various exploration programs taken up during 2012-13, 2013-14, 2014-15 and the current year are given in Annex-II.

The state-wise and mineral-wise mineral production for the years 2012-13, 2013-14 and 2014-15 (P), as per the information available with the Indian Bureau of Mines, is given in Annex-III.

            A National Mineral Exploration Policy [NMEP] is being drafted which would address important issues like: baseline geoscientific data generation and dissemination; prioritization of mineral commodities for regional and detailed exploration; institution to be set up for research in mineral deposit targeting through public and private collaboration; beneficiation of low grade ores for utilization and strategic requirements; incentivizing private sector participation in the given legal framework.

            FDI up to 100% is allowed in exploration, mining, minerals processing and metallurgy under the automatic route for all non-fuel and non-atomic minerals including diamonds and precious stones.

            The Mines and Minerals (Development and Regulation) (MMDR) Act 1957, was amended through the MMDR Amendment Ordinance, 2015, which was promulgated on the 12th January, 2015. The MMDR Amendment Act, 2015 to replace the MMDR Amendment Ordinance, 2015 was passed by the Parliament and has come into force with effect from 12th January, 2015.

The most important provision of the MMDR Amendment Act, 2015 is the grant of mineral concessions, for major minerals including iron ore, through auction by competitive bidding which is a transparent and non-discriminatory method and which will also obtain for the State Government its fair share of value of the mineral resources.

The other important provisions of the MMDR Amendment Act, 2015 are:

(i)                 Transition provisions for extension of existing leases to obviate disruptions in supply of ore and to ensure regular supply of raw material to the industry;
(ii)               Establishment of District Mineral Foundation for the interest and benefit of persons, and areas affected by mining related operations;
(iii)             Assured tenure and easy transferability of mineral concessions granted through auction;
(iv)             Establishment of National Mineral Exploration Trust for regional and detailed exploration; and
(v)               Stricter penalty provisions to deter illegal mining.

Mineral Concession Rules 
            In a statement laid on the table of the Lok Sabha, today the Minister for Mines and Steel Shri Narendra Singh Tomar said thatthe Mineral Concession Rules (MCR), 1960 have been framed under section 13 of the Mines and Minerals (Development and Regulation) Act, 1957 for regulating the grant of reconnaissance permits, prospecting licences and mining leases in respect of minerals and for purposes connected therewith. The MCR, 1960, inter-alia, provides for the following matters, namely:-

i.       the procedure for obtaining a reconnaissance permit, a prospecting licence or a mining lease and the terms on which, and the conditions subject to which, such a permit, licence or lease may be granted or renewed;
ii.     the manner of computation of royalty separately in respect of land in which the minerals vest with the Government and land in which the minerals vest in a person other than the Government;
iii.   the fixing and collection of fees for reconnaissance permits, prospecting licences or mining leases, surface rent, security deposit, fines, other fees or charges and the time within which and the manner in which the dead rent or royalty shall be payable;
iv.   the reports and statements to be submitted by holders of reconnaissance permits or prospecting licences or owners of mines and the authority to which such reports and statements shall be submitted; and
v.     the period within which applications for revision of any order passed by a State Government or other authority in exercise of any power conferred by or under this Act, may be made, the fees to be paid therefor and the documents which shall accompany such applications and the manner in which such applications shall be disposed of.
            Prior to 12th January 2015, State Governments were empowered to grant renewals for mining leases except coal, lignite and atomic minerals. In compliance to the judgment of the Supreme Court delivered on 21.04.2014 in WP (Civil) 435/2012 [in the matter of Goa Foundation Vs UOI & Ors], the MCR, 1960 was amended on 18.07.2014 to prohibit deemed extensions for second and subsequent renewals. However, this provision is no longer in force since 12.01.2015 the date on which the MMDR Amendment Act, 2015 amending the provision of the MMDR Act, 1957 came into force. Through the MMDR Amendment Act, 2015 the provisions for renewal of mining lease have been done away with for minerals except coal and lignite.
         To obviate disruption in supply of ore and to ensure regular supply of raw material to the industry, transitory provisions for extension of existing mining leases have been provided in section 8A of the MMDR Amendment Act, 2015. Sub-sections (5) and (6) of section 8A has provisions which provide that period of mining leases granted before 12th January, 2015 will be deemed to be extended till the following period, whichever is later:

(i)          31st March, 2030 in case mineral is used for captive purpose, or 31st March, 2020 in case mineral is used for other than captive purpose;
(ii)        completion of renewal period;
(iii)      fifty years from date of grant of mining lease.

            As per sub-section (2) of section 8A introduced through the MMDR Amendment Act, 2015, on and from the date of the commencement of the MMDR Amendment Act, 2015 all mining leases shall be granted for the period of fifty years. Further, as per sub-section (3) of section 8A all mining leases granted before the commencement of the MMDR Amendment Act, 2015 shall be deemed to have been granted for a period of fifty years.

In addition to this, sub-section (5) and (6) of section 8A  provide for extension of the tenure of mining leases beyond a period of 40 years, details of which have been given above.
Procurement of Minerals 
Mining of minerals is regulated by the provisions of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act 1957) and the rules made thereunder. Section 23C of the MMDR Act, 1957 empowers state governments to frame rules for preventing illegal mining, transportation and storage of minerals. As such, prevention of illegal mining comes under the administrative and legislative jurisdiction of the state governments. No state government has reported any specific incident of loss of procurement of Minerals from any region of the country disturbed by naxalite activities.

The Seventh Report of Second Administrative Reforms Commission had recommended setting up of special anti-extortion and anti-money laundering cell by State Police/State Government. The State Governments have been accordingly advised to establish such cells to prevent any nexus between illegal mining/forest contractors, transporters and extremists.

To foster a responsible mining in a fair and transparent manner across India, MMDR Act, 1957 has been amended w.e.f. 12.1.2015. New mining concessions are to be accorded through auction. Specified mineralization under the Minerals (Evidence of Minerals Contents) Rules, 2015 sets the criteria for selection of blocks in different regions. Further, the penal provisions associated with illegal mining have been strengthened to serve as deterrent for any illegal encroachment of mining areas.

This information was given by Minister of State Sh. Vishnu Deo Sai in reply to a question in Lok Sabha today. 
Mineral Explorations 
            The Central Government has established the National Mineral Exploration Trust [NMET] vide Gazette Notification No. G.S.R.633 (E) dated 14th August, 2015. The NMET has a Governing Body chaired by the Union Minister In-charge of Ministry of Mines and an Executive Committee chaired by Secretary, Ministry of Mines. Further, vide Gazette Notification No. G.S.R.632 (E) dated 14th August, 2015, the Government has notified the National Mineral Exploration Trust Rules, 2015. Both these Gazette Notifications are available on the website of Ministry of Mines i.e. .

            The primary objective of the NMET is to promote regional and detailed mineral exploration in the country to increase overall mineral production and achieve sustainable development of the mineral sector. The NMET Rules detail the objects and functions of the Trust.

            Geological Survey of India [GSI], an attached office of the Ministry of Mines, proposes to take up aerogeophysical survey of 8.13 lakh square kilometer of geological potential area in the country through outsourcing.

            In the first phase, it has been proposed that, reconnaissance aerogeophysical survey of the area will be completed with magnetometer and gravity sensors, and in the second phase, high resolution airborne survey will be carried out over potential mineral zones identified from the reconnaissance survey. The potential area for aerogeophysical survey covers parts of the States of Andhra Pradesh, Telangana, Rajasthan, Karnataka, Chhattisgarh, Odisha, Madhya Pradesh, Maharashtra, Gujarat, Jharkhand, Bihar, Tamil Nadu, Uttar Pradesh, Kerala, West Bengal, Meghalaya, Goa, Haryana, Sikkim and Assam. The data generated through aerogeophysical survey will be shared with the concerned States for taking up further exploration works.

            GSI, being the principal agency for mineral resource assessment of the country, has taken the following major steps for accelerating mineral exploration:

·         Adoption of multisensor aero-geophysical surveys and hyper-spectral mapping.
·         Integrated surveys for targeting concealed and deep-seated mineral deposits.
·         Introduction of high precision instruments for generating precise geophysical and chemical data.
·         Expeditious completion of geochemical and geophysical mapping in the geologically high mineral potential area measuring about 3.44 lakh sq km by 2017 and 2018 respectively.
·         Procurement of a state-of-the-art Oceanographic Research Vessel for survey and exploration in Exclusive Economic Zone [EEZ] and beyond.

            Further, the Government has amended the Mines and Minerals (Development and Regulation) (MMDR) Act 1957, through the MMDR Amendment Act 2015 with effect from 12.1.2015, for promoting the mining sector. The amendments in the MMDR Act, 1957 are expected to give impetus to the sector by:
(i)           removing discretion in grant of mineral concessions, as mineral concessions will now be granted through auction by competitive bidding;
(ii)         allowing opening of mines which were closed due to pendency of decision on applications for second or subsequent renewal through extension of validity of lease period of the existing leases;
(iii)       providing security of tenure of mining lease period with a uniform lease period of 50 years;
(iv)       simplification of procedure, and removal of delay by eliminating requirement of prior approval of Central Government for grant of mining lease through auction;
(v)         allowing easy transferability of mineral concessions granted through auction, which would facilitate investments into the mining sector;
(vi)       establishment of District Mineral Foundation, which will work for the interest and benefit of persons, and areas, affected by mining related operations.

            The Central Government has further empowered the State Governments for regulation of grant of mineral concessions in respect of an additional 31 minerals, which have been notified as ‘minor’ minerals on 10.2.2015.
This information was given by Minister of State Sh. Vishnu Deo Sai in reply to a question in Lok Sabha today.
Allotment of Iron Ore Mines 
As per the provisions of the Mines and Minerals (Development and Regulation) (MMDR) Act, 1957, State Government is empowered to grant mining leases for all minerals. However, before the MMDR Amendment Act, 2015, prior approval of the Central Government was required under Section 5(1) of the MMDR Act for granting mineral concessions in respect of minerals specified in Parts ‘C’ of the First Schedule to the MMDR Act, 1957, including iron ore, which has been done away with.

As per the information received from the Indian Bureau of Mines(IBM), the details of mining leases for iron ore granted to private and public sector companies during each of the last three years and the current year is given at Annexure-I.

The information regarding revenue generated from mines is not centrally maintained. However, the details of royalty collected by the State Governments in respect of iron ore for the years 2012-13 to 2014-15 as informed by IBM is given at Annexure-II.
Annexure I

Area in ha.
Date of Grant
Period in years
Name & Address
Year 2012-13
Year 2013-14
Iron ore &Laterite
Madhya Pradesh
Brokan Hill Mining Company, 188,Rijawan Bagh, Lalghati, V.I.P. Road, Bhopal, Madhya Pradesh.
Iron ore,Laterite, Clay & Ochre
Madhya Pradesh
R.M.G. Super Mines Pvt. Ltd., 33,Jagaran Bhavan, Press Complex, M.P. Nagar, Bhopal , Madhya Pradesh.
Manganese ore, Iron ore & Laterite,
Madhya Pradesh

Shrikant Pandey, S/o Shri JanardanPandey, Vill. & Post Gandhigram, Dist. Jabalpur - 483 222, Madhya Pradesh.
Year 2014-15
Year 2015-16 (Upto Sept., 2015)
Iron ore/
Manganese ore/ Laterite
Madhya Pradesh
Shri Sai Industries, (Late Shri VijayPratap Singh Legal Heir) Shop No. 3,Bangali Club Market, Jabalpur, Madhya Pradesh
Source: Information received from respective State Governments
Annexure- II
State wise Royalty accrual for Iron ore during 2012-13 to 2014-15
(In Rs. Lakhs)
M. P

This information was given by Minister of State Sh. Vishnu Deo Sai in reply to a question in Lok Sabha today.

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