UNIVERSITY OF PETROLEUM AND ENERGY STUDIESCOLLEGE OF LEGAL STUDIES

LAW OF MINING ASSIGNMENTNEW MINERAL POLICY 2015

Submitted to:Submitted by:Sr. TOBI THOMASADITI GUPTA(UPES)500012340B.A L.L.BRoll No. 7National Mineral Policy The Government had approved the new National Mineral Policy, 2008 on 13th March 2008. The new Policy enunciates measures to streamline and simplify the procedures for grant of mineral concessions, develop a sustainable framework for optimum utilization of the country's natural mineral resources for the industrial growth in the country and at the same time improving the life of people living in the mining areas which are generally located in the backward and tribal regions of the country. Apart from these, the National Mineral Policy has enunciated several policy measures that seek to strengthen the framework/ institutions supporting the Indian Mining sector, which include the Indian Bureau of Mines, Geological Survey of India and State Directorates of Mining and Geology. The new Policy spelt out measures to optimize the scientific mining and exploration of the country's mineral resources. Some of the important measures are enumerated below: An Act to replace the existing Mines and Minerals (Development and Regulation) Act, 1957 has been formulated and the draft Act has been posted on website of Ministry of Mines for comments. In order to ensure implementation of the non-legislative policy initiatives given in the National Mineral Policy, 2008, the Ministry of Mines has constituted an Implementation Committee vide Ministry of Mines Order No.15 (1)/2008-MV(Pt.) dated 23.06.2009 to oversee the implementation of the action points arising out of the National Mineral Policy, under chairmanship of the then Additional Secretary (Mines).

National Mineral Policy (NMP), 1993 In pursuance of the reforms initiated by the Government of India in July, 1991 in fiscal, industrial and trade regimes, the National Mineral Policy was announced in March, 1993. The National Mineral Policy recognized the need for encouraging private investment including foreign direct investment, and for attracting state-of-art technology in the mineral sector. The policy stressed that the Central Government, in consultation with the State Governments, shall continue to formulate legal measures for the regulation of mines and the development of mineral resources to ensure basic uniformity in mineral administration so that the development of mineral resources keeps pace, and is in consonance with the national policy goals.PREAMBLEGovernment of INDIA has considered it appropriate to promote proper use of huge mineral resources of the INDIA for sustainable economic development of its people and the nation as a whole by amending its existing mineral policy. To achieve this, it has been decided to simplify the rules and procedures so as to ensure scientific, safe and eco-friendly mining, productivity, conservation and cost-effectiveness, social commitment, zero waste mining, health and welfare of people. As a major resource for development the extraction and management of minerals has to be integrated into the overall strategy of the countrys economic development.

Mines and Minerals (Development and Regulation) Bill, 2011 approvedThe Union Cabinet has 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 to repeal the existing Mines and Minerals (Development and Regulation)Act,1957.The new MMDR Bill, 2011, aims to introduce better legislative environment for attracting investment and technology into the mining sector by the following:

States may call for applications in notified areas of known mineralization for prospecting based on technical knowledge, value addition, end-use proposed ore -linkage etc. and to invite financial bid;

States may grant of direct mining concessions through bidding based on a prospecting report and feasibility study in notified areas where data of minerals is adequate for the purpose;

State Government may set up a minimum floor price for competitive bidding; Special provisions for allowing mining of small deposits in cluster, where cooperatives can apply; National Mining Regulatory Authority for major minerals - State Governments may set up similar Authority at State level for minor minerals; Imposition of a Central cess and a State cess, and setting up of Mineral Funds at National and State Level for capacity creation; For the purpose of sharing the benefits of mining with persons or families having occupation, usufruct or traditional rights in mining areas, and for local area infrastructure, creation an amount equal to royalty in case of mineral other than coal, and 26% of net profits, in the case of coal, has been proposed to be credited each year to district Level Mineral Foundation;

Sustainable and scientific mining through provision for a Sustainable Development Framework; Consultation with local community before notifying an area for grant of concession, and for approval of Mine Closure Plans; Enhanced penalties for violation of provisions of the Act, including debarment of person convicted of illegal mining for future grants and termination of all mineral concessions held by such person; and Establishment of Special Courts at the State level for speedier disposal of the cases of illegal mining.

The new draft MMDR Act would have financial implications in the creation of an independent National Mining Tribunal and National Mining Regulatory Authority at the Central Level, and the expenditure involved in the capacity building of the Indian Bureau of Mines. The funds for this expenditure are likely to be met from levy of cess at the rate of 2.5% on the basis of Customs/Excise Duty.The new MMDR Act would be implemented immediately after receiving Parliamentary approval and President's assent, and a date of commencement would be notified separately.The approval will help in developing the country's mining sector to its full potential so as to put the nation's mineral resources to best use for national economic growth, and ensure raw materials security in the long term national interest.Sustainable Development Mining is closely linked with forestry and environment issues. A significant part of the nations known reserves of some important minerals are in areas which are under forest cover. Further, mining activity is an intervention in the environment and has the potential to disturb the ecological balance of an area. However, the needs of economic development make the extraction of the nations mineral resources an important priority. A framework of sustainable development will be designed which takes care of bio diversity issues and to ensure that mining activity takes place along with suitable measures for restoration of the ecological balance. Special care will be taken to protect the interest of host and indigenous (tribal) populations through developing models of stakeholder interest based on international best practice. Project affected persons will be protected through comprehensive relief and rehabilitation packages in line with the National Rehabilitation and Resettlement Policy.BASIC FEATURES1. To develop and exploit mineral resources in a scientific and sustainable manner, taking into account the interest of the State, People and Environment. 1. To facilitate exploration work for accurate reserve estimation of the mineral deposits.1. To review the existing practice of random exploitation of mineral resources and to regulate the same.1. To carry out geological mapping of mineral resources. 1. To promote necessary linkages between mining and mineral industry.1. To regulate investment in mining and generate employment for local population. 1. To promote research and development activities in major mineral sector.1. To ensure establishment of appropriate training facility for human resource development to meet the man power requirement of the major mineral industry.1. To minimize adverse effect of major mineral development on the environment and ecology through appropriate preventive and control measures.1. To ensure conduct of mining operation with due regards to safety and health of all concerned1. To create a database on major mineral resources in the state.1. To take steps to promote geo-tourism.1. To promote private sector participation in various aspects of mineral development, which includes exploration, infrastructure building, mining and other mining related activities and mineral based industries.1. To safeguard the rights of all stakeholders including rights of affected population.Towards Sustainable Mining and Mineral Conservation:-Based on the broad objectives of the major mining policy the state shall go for a paradigm shift to ensure effective regulation and sustainable growth and development of mining in the state. Directorate of Mines and Geology shall undertake the following measures for promoting sustainable mining in the state and ensure fair and transparent regulatory regime. To exploit geological potentials of the state on a scientific basis after due exploration and prospecting. Development of a proper inventory of resources and reserves, a mining tenement registry, preparation of mineral atlas on priority. State Directorate of Mining and Geology will be strengthened with man power, equipment and skills. Mining is closely related to the forest and environment. A suitable framework will be designed to ensure mining along with suitable measures for restoration of the ecological balance that had been disturbed so far. Value addition will be actively encouraged. Value addition will go hand in hand with the growth of the mineral sector as a stand-alone industrial activity. The minerals have to be conserved for the future generations. Suitable infra-structure facilities to be created financed by user fee concept Wastage of natural resources will be prevented by amalgamating small deposits suitably. The closure of mines has to be systematically planned and Ecological balance will be restored including utilization of existing pits for water conservation and harvesting of crops. The fair share of revenues collection from minerals will be utilized to improve the standard of living of those residing in mining areas. Take steps both regulatory and developmental to ensure zero tolerance to illegal mining of any kind. Research and development in minerals will receive prime importance and a comprehensive institutional framework for R & D and training will be developed.REGULATION OF MINERALSManagement of mineral resources is the responsibility of the Central Government and the State Governments in terms of Entry 54 of the Union List (List I) and Entry 23 of the State List (List II) of the Seventh Schedule of the Constitution of India. The Mines and Minerals (Regulation and Development) Act, 1957 lays down the legal frame-work for the regulation of mines and development of all minerals other than petroleum and natural gas. The Central Government have framed the Mineral Concession Rules 1960 for regulating grant of prospecting licences and mining leases in respect of all minerals other than atomic minerals and minor minerals. The State Governments have framed the rules in regard to minor minerals. The Central Government have also framed the Mineral Conservation and Development Rules, 1988 for conservation and systematic development of minerals. These are applicable to all minerals except coal, atomic minerals and minor minerals.The Central Government in consultation with the State Governments, shall continue to formulate the legal measures for the regulation of mines and the development of mineral resources to ensure basic uniformity in mineral administration and to ensure that the development of mineral resources keeps pace, and is in consonance with the national policy goals. The regulation of mines and development of mineral resources in accordance with the national goals and priorities shall be the responsibility of the Central and State Governments.Pollution And Its Social Impact: Control of Pollution due to transportation and ground water preservation. Polluter pays principle will be strictly engaged and applied while targeting the basic objective of prevention of pollution and in this regard suitable provisions would be included in the transportation rules including:Washing of tyres of truck and other vehicles before exiting the mining lease area and entry on public road.Periodical cleaning of public roads by the agencies appointed by the state.Pollution Control equipments to be installed at set points at strategic locations between mining areas and unloading point.Regulatory fees to regulate the mechanism as stated above to be recovered from the mining lease holders. Ground water preservation : Utilization of ground water by the mining lessee in the lease area, for washing of ore, or for any other purpose including its drawl for excavation in cases where working of mines in terms of Environmental Clearance has gone below the ground water level to be fully regulated, controlled and monitored.

Dump Handling Policy: For Effective Regulation of Dump and Stock YardsThe tailings or dumps contain iron ore mined from the mining site after the recovery of marketable quality of ore by more or less effective recovery methods; the dumps still contain unrecovered iron ore. They are not simply discarded but kept for re-treatment as and when technology became available whereby the ore could be recovered economically and, sometimes, under circumstances where Export of the ore could not take place in times of economic depression. The dump material can be easily distinguished from the surface of the ground on which it is situated. Tailings dumps are enormous in size but despite their size they are distinguishable from the surface of the land and are capable of being removed without injuring the land; they are movables and could be treated as and when necessary and they do not get acceded to the land having been left there for a long period.Welfare and Social Responsibilities: To ensure active involvement of various agencies, organization, Institutions, Industries, etc engaged in mineral development sector in welfare and socioeconomic development of mineral bearing and its surrounding areas : -The State Government will set up a Mineral Advisory Committee comprising of technical experts and professional Institutions to advise undertaking welfare and socio-economic development of mineral bearing and its surrounding areas. The Mine Leases would be required to provide health care, education, drinking water safe and hygienic conditions of living and welfare facilities to the mine workers and their families, as envisaged under the relevant labor laws. The mine Leases would be required to set up health facilities specially equipped to cater to the needs of women and children in and adjoining mining areas. The Government shall make all out efforts through its administrative machineries or otherwise to prevent any type of child labor as envisaged in the prevalent Acts and Regulation in the country on the subject.

Strong growth in the Indian mining industryAs a result of strong economic growth, the Indian mining industry increased at a CAGR of 11.1% during the review period (2004-09), to value more than US$20bn in 2009. Total mineral production grew at a CAGR of 7.6% in the same period, to reach an estimated 1.1 billion tons in 2009.During the forecast period (2010-15), the expansion of key end markets such as construction, infrastructure and power generation will continue to drive the demand for minerals. As a result, the Indian mining industry is forecast to produce more than 1.5 billion tons of minerals by 2015, growing at a CAGR of almost 6% during the forecast period.Increase in royalty rates will affect company revenueThe Indian Government adopted an increase in mining royalties in August 2009 for minerals such as copper, zinc and lead. For instance, the government increased royalties on zinc ore from 6.6% to 8%, imposing a 10% value-added royalty on iron ore mining.For iron ore mining companies, the new royalty will mean switching to a tax regime under which the companies will be charged based on the market value of the minerals produced, rather than the existing system of flat rates based on volumes. The new system is designed to make assessment and collection simpler and enhance royalty accruals to state governments. However, the revised rates will also increase production costs for miners, depending on the value of the mineral.Coal dominates the Indian mining sectorCoal was India's most valued mineral in 2009, accounting for half of the total mineral production. Iron ore dominates the metallic mineral category, with its total production valued at US$4.8bn in 2009.

The non-metallic category is dominated by limestone, with its production valued at US$0.6bn in 2009, or 2.8% of the total Indian mineral production.While coal accounts for more than half of all Indian mining activity, iron ore dominates the metallic mineral category, accounting for four-fifths of this category's mining activity. Limestone accounts for three-quarters of Indian non-metallic mineral production.Government policy for FDIForeign Direct Investment Policy India possesses great potential of mineral resources. However, there exists considerable scope for augmenting the resource position by further exploration of known deposits and discoveries of new deposits, adopting state-of-the-art technology and modern methods like aerial reconnaissance or geophysical surveys.The geological and metallogenic history of India is similar to mineral rich Australia, South Africa, South America, and Antarctica , all of which formed a continuous landmass prior to the breaking up of Gondwanaland. It also has some features similar to the mineral rich Canadian shield of North America. Being aware of the vast potential of the sector, the Indian Government, has been consistently and in a pragmatic manner opening up the previously controlled regime to usher private investment in the sector and infuse funds, technology and managerial expertise. The opening up of the Indian mining sector has, therefore, generated considerable global interest. The Indian mining sector was opened up to Foreign Direct Investment in 1993 after the announcement of the New Mineral Policy. Initially, all proposals were considered on a case to case basis by the Foreign Investment Promotion Board (FIPB). FDI policy in the mining sector was further liberalized in January 1997 which opened up an automatic approval route for investments involving foreign equity participation up to 50% in mining projects, and up to 74% in services incidental to mining.The Foreign Direct Investment (FDI) policy in the mining sector has been gradually liberalized over the last few years. FDI cap for exploration and mining of diamonds and precious stones have been increased to 100% under the automatic route with effect from 10th February, 2006.With this, the Foreign Direct Investment in the mining sector for all non-atomic and non-fuel minerals have now been fully opened up to 100% through the automatic route including diamonds and precious stones.Relief & Rehabilitation of Displaced and Affected PersonsMining operations often involve acquisition of land held by individuals including those belonging to the weaker sections. In all such cases a social assessment will be undertaken to ensure that suitable Relief and Rehabilitation packages are evolved. While compensation is generally paid to the owner for his acquired land, rehabilitation of affected persons in the form of substitute land, land for housing and jobs is not always adequate. In areas in which minerals occur and which are inhabited by tribal communities and weaker sections it is imperative to recognize resettlement and rehabilitation issues as intrinsic to the development process of the affected zone. Thus all measures proposed to be taken will be formulated with the active participation of the affected persons, rather than externally imposed.A careful assessment of the economic, environmental and social impact on the affected persons will be made. A mechanism will be evolved which would actually improve the living standards of the affected population and ensure for them a sustainable income above the poverty line. For this purpose, all the provisions of the National Rehabilitation and Resettlement Policy or any revised Policy or Statute that may come into operation, will be followed.Penal LiabilityIt is very necessary to introduce penal liability for illegal mining as the instances of illegal mining are increasing day by day. Everyone should be punished for not following the provisions of the mining. It is very necessary for the development of the country.