DAILY NEWS ANALYSIS

GS-III : Economic Issues Mine and minerals

31 March, 2021
3 Min Read

Mines and Minerals (Development and Regulation) Amendment Bill, 2021

The Rajya Sabha passed the Mines and Minerals (Development and Regulation), Amendment Bill, 2021 doing away with the distinction between the captive and non-captive mines, allowing captive mines to sell up to 50% of the minerals excavated during the current year that will also help towards the auctioning of more 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.
Earlier, the ores extracted from captive mines were only used by captive industries.
- The bill allows the leaseholders of captive mines to sell up to 50% of their ore into the open market.
  - Additional charges will have to be paid to the government by the lessee for selling minerals in the open market.
- The 50% cap is flexible as government can go above the cap if necessary.
The bill provides that all clearances and licences granted shall continue till the reserves have been mined and post the expiry or termination of the lease, will be transferred to the next successful bidder.
- This will help attract investors as under the previous regime, the new lessee had pre-embedded clearances for only two years, making it difficult to get fresh clearances within this time period.
As per the bill, if the lease for a mine is expired and the state government is unable to auction a mine, then the central government can step in for auctions; the idea is to not leave a mine idle.
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.
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 my 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 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.

Source: PIB

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