November 29, 2020

Mines and Minerals (Regulation and Development) Act (2015)

Introduction

The Mines and Minerals regulation act[1] was introduced in 1957 to regulate the Indian mining industry. The act enclosed multiple provisions to bring some semblance into the completely unregularized Indian mining sector. It formed the basic framework for all mining laws in the country. The act covered from preliminary provisions of licensing a mine to the rather more complicated stage of dispersing the mined materials. The legislative piece substantially defined which minerals, mining oils, leases etc., fall within the extractable category and what rules must be followed while performing the said activity.[2]

The legal provision truly brought about a change in the mining sector and transformed what earlier was a wild-west field into one of the most productive spheres of the Indian economy. Nonetheless, despite the many changes the act did bring about, a lot of issues were side-lined and left unaddressed. The provision was amended a number of times; eight to be exact, before the 2015 revision. Its no surprise that a legislation enacted in the late fifties would need changes with time. The legislative amendments are a medium through which an act or law is kept up to date with the field it governs. The earlier eight amendments did bring about substantial changes in the act, it made it more relative to the times, where the applicability was made more approachable and its functions better defined.[3] The act however still lacked in fundamental aspects of transparency and tenure. The government recognised the many failings of the act and introduced the 2015 amendment to further modify and adapt the legislative piece. The 2015 revision aimed at the finer irregularities in the law and how to better draft a change. Accordingly, the purpose of this writeup is to explore the rather expansive piece of legislation i.e., the Mines and Mineral act while pivoting on the 2015 amendment.

Significant features

The mines and minerals act is applicable to all extractable commodities except natural and atomic minerals. The two unmarked categories fall within the state’s purview and the state list defines the rules for minerals demarked as such. A particular ore such as river sand is classified as a minor mineral and the state in which its mine falls will be the one to specify rules for it. Nonetheless, the factor of discussion which is the 2015 amendment did in fact change a lot of factors. The amendment was first introduced as an ordinance on the 12th of January, 2015. However, the draft for public debate was introduced in November of the previous year. The Lokh Sabha passed the amended provision on 3rd march and the Rajya Sabha did the same on the 20th of March. The bill was introduced at a time when Odhissa’s twenty-six mills had seen their licenses getting cancelled by the supreme court. The mills had been operating even after their tenure’s were over while their licenses were left unrenewed. The Bill seeked to make the whole licensing process transparent and accessible.[4] The major provision it entailed was to auction of licenses instead of a private sale. The idea was to make the licenses available for public bidding, where a transparent process for each bid will be followed; where the highest bidder is allotted the license.[5]

The amendment also fixates that a particular percentage of the revenue from the mine will go to the development of the area it is situated in. The Government in an attempt to balance out the harm mines cause, made it compulsory for the license holders to contribute specific sums for the development of the areas their mines situate. The state will set the percentage of revenue’s to be paid and the amount shall be in addition to the royalties. Moreover, the act substantiated a fund to encourage non coal-based mining and promote the exploration of more geo-friendly extracts. The fund was allotted a preliminary amount of five hundred crores and was deemed to receive a percentage of all mining incomes of the licenced extractors. [6]

The validity period of the licence was also increased; the earlier thirty-year period was expanded to now fifty years. The practice of renewal of licenses was also removed, upon completion of a term the mining rights will be up for auctioning again. A significant addition to the mining field was also the prospect-cum-mining provision. The government introduced a new two stage process. The interested buyers now had a consolidated procedure of prospective presentation and allotment which came afterwards. It did in fact cut down on a lot of unnecessary expenditure and cut short the time involved in the process. The prospect-cum-mining provision is applicable on all minerals baring a few. Minerals like Bauxite, manganese and limestone will not require the prospect license as they fall under the Government’s notified category.[7] Notified elements are those recognised by the government which have acquired prelisted licenses. Nonetheless, the minerals which do not fall under the notified category, require both prospective and mining licenses.

The act also introduced stricter punitive measures.[8] The Government made illegal mining, violation of norms and trespassing cognizable offences, with a maximum imprisonment period of two years. The new feature treats the rather historically avoided flotation of mining rules a lot more seriously. The state was also allotted the function to set up special courts to deal with mining offenses. The new provision has immensely helped dissipate the status quo of the mining industry and establish a sense of legal authority.

Inadequacies

The act’s major provision which divides licensing process into two stages; prospect cum mining is heavily criticised. Experts maintain that a prospective license holder is highly unlikely to invest in a mine when he hasn’t at first gone through the preliminary checking stage. The Society for Geo technologist and Scientists have claimed for more than four years that no one shall be interested in applying for a license unless, they have already performed reserve checks to see if a particular place has minerals or not. The opposing view has had an important place no doubt, as an investor is highly unlikely to put money in a project which he has no information about.

Another highly criticised fragment of the act is that the new period of licensing which is fifty years is too long. Any provision which gives a stagnation period of half a century must be cut short. Any new changes in mining laws, redrafting of a license holder etc., with such a long period will become troublesome to hold accountability. The demand for a shorter period is reasonably equitable and must be administered for a more objective and definitive mining act.

Many reactionary groups also called for better provisions for the Tribals who are quite often displaced by mining activities. Additionally, there were reactionary claims at the start which maintained that the act reduced the state’s power. The latter claims are political in nature and don’t really stand much ground as all the practical features are instilled with the State Governments. Even though the centre set up the decisive powers for mining activities, the primary powers of execution are with the state authorities.

Conclusion

The Mining and Minerals act is one the few legislative pieces which historically has revamped the extractable minerals field. The act no doubt legislates the terminal essence of all mining activities; bringing with it a sense of legal authority. The 2015 amendment did sufficiently encapsulate the need for transparency in the licensing process. The idea behind holding auctions to provide contracts, necessitates a level playing field for all interested. The essence of a legislative piece, apart from the punitive and pecuniary ones, is to establish an equitable social identity for the field it regulates. The act and its amendment make sure that every party has an equal and a fair opportunity to represent themselves. Moreover, the introduction of a two-stage process to acquire mining rights removes the rather opaque and pre dated practice of preliminary allotment. The new amendment has brought about significant changes in the whole process, nonetheless the obvious flaws must be addressed. The prospective stage should be adultered and a provision to allow the checking of a particular mine before applying must be allowed. Additionally, the time period of fifty years should be revised and brought down to thirty as it originally was, five decades is too long to allot a mining license. No legislative draft comes without flaws; however, it’s the duty of the legislature to check them and bring a difference. The act is fundamentally equitable, nevertheless for it to be equal in practice these rather small but significant faults must be addressed. A fair and transparent mining sphere requires no lacunas in the legislations governing it.

[1] The Mines and Minerals Regulation and Development (Amendment) Act,2015.

[2] “Mines and Minerals (Development and Regulation) Amendment Act, 2015”(PDF). E-Gazette. Retrieved 31 March 2015.

[3] “Ordinance on mines, ninth by NDA govt”. The Hindu. 14 January 2015. Retrieved 9 March 2015.

[4] “Union govt to create District Mineral Foundation in mining-affected areas”. The Hindu. 27 November 2015. Retrieved 9 March 2015

[5] “Parliament passes Mines and Minerals, Coal Mines Bill”. Zee News. 21 March 2015. Retrieved 27 March 2015.

[6] “Proposed mines Bill for hefty penalty for violators”. Live Mint. 18 November 2015. Retrieved 9 March 2015.

[7] “LS Passes Mines and Minerals Bill Amid Oppn Walkout”. The New Indian Express. 4 March 2015. Retrieved 9 March 2015.

[8] “Land and Coal Bills introduced in Lok Sabha”. The Hindu. 24 February 2015. Retrieved 9 March 2015


Author Details:

Srihari Mangalam (West Bengal National University of Juridical Sciences)

Shivangi Prakash (Mumbai National Law University)

The views of the author are personal only. (if any)

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