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Mines and Minerals (Development and Regulation) Bill, 2011 A Critical Analysis

Updated: August 4, 2012 3:01 pm

The Union Cabinet has in principle 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 has approved the proposal to repeal the existing Mines and Minerals (Development and Regulation) Act, 1957. Way back in 2006, the government had set the cat among the pigeons by constituting a high-level committee which had strongly recommended for evolving a mining code in consonance with the current international practices for streamlining and simplifying procedures for grant of mineral concessions to minimise delays, laches etc.

Based on the recommendations of the high-powered committee constituted in 2006, the government had finally declared its National Mineral Policy on March 13, 2008. After several rounds of deliberations with the stakeholders including the state governments, ministries and Departments of Central Government, Industry and Civil Society concerned, the government has now finally been able to evolve a new Mines and Minerals (Development and Regulation) Bill, 2011 with the basic objective of implementing the policy directions as enunciated in the National Mineral Policy which the government had announced. The expectations from the proposed new Bill are quite high not only in the government circles but also among the stakeholders concerned.

It is imperative to reveal here that the new Mines and Minerals (Development and Regulation) Bill, 2011 was initially forwarded to a Group of Ministers on June 14, 2010, after examining it thoroughly. It also must be mentioned here that after going through brain-storming five rounds of discussions and deliberations, it had finally recommended the draft Bill to the Cabinet. What also needs to be brought out here is that the Group of Ministers in its meeting concluded on July 7, 2011, had also finally recommended the draft Mines and Minerals (Development and Regulation) Bill, 2011 for being introduced in Parliament for its approval. This Bill was introduced in the Lok Sabha on December 12, 2011.

This new Mines and Minerals (Development and Regulation) Bill, 2011 has been enacted with the basic objective of introducing better legislative environment for the purpose of attracting more and more investment and technology into the mining sector by taking a range of new measures which will contribute significantly towards that end. As for instance, the states may call for applications in notified areas of known mineralisation for prospecting based on technical knowledge, value addition, end-use proposed ore linkage etc and to invite financial bid from among the available players in the market. Also, states are vested with the power of granting direct mining concessions through bidding based on a prospecting report and feasibility study in notified areas where data of minerals is suitably adequate for meeting the said purpose. Gram Sabhas, District Councils or District Panchayats must be consulted before the notification of an area for mineral concessions.

The Bill empowers the central government to invite competitive offers for grant of mineral concession in case of coal minerals, and similarly state governments to invite competitive offers in case of other minerals. State governments have the discretion to give preference to a cooperative of Scheduled Tribes in the grant of mineral concession in a scheduled or tribal area.

It is also provided in the Bill that the state government may set up a minimum floor price for competitive bidding. Special provisions have been made in the Bill for allowing mining of small deposits in cluster where cooperatives have the liberty to apply. It also provides for National Mining Regulatory Authority for major minerals and on similar lines the state governments may set up similar Mining Regulatory Authority at State level for minor minerals. It seeks to consolidate and amend the law relating to the scientific development and regulation of mines and minerals.

This Bill also provides for imposition of a central cess and a state cess and apart from this also postulates for setting-up of Mineral Funds at National and State levels for the purpose of capacity creation. The central government may levy and collect a cess on major minerals as a customs duty in case of export, and an excise duty in other cases.

The Bill also contains provisions for establishment of Special Courts at the State level for speedier disposal pertaining to cases of illegal mining. One hopes that it is made into a law soon by the government without any more further delay now.

By Sanjeev Sirohi

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