College of Legal Studies

Assignment on

MINERAL POLICY 2015

Submitted to:Mr. Toby Thomas,Assistant Professor (Selection Grade)College of Legal Studies, University of Petroleum & Energy Studies, Dehradun

Submitted by-Loveleen SinghBA LLB 6th sem Sec-aRoll no-65500012007MINERAL POLICY 2015

Minerals are a valuable natural resource being the vital raw material for infrastructure,capital goods and basic industries. As a major resource for development the extraction andmanagement of minerals has to be integrated into the overall strategy of the countryseconomic development. The exploitation of minerals has to be guided by long-termnational goals and perspectives. Just as these goals and perspectives are dynamic andresponsive to the changing global economic scenario so also the national mineral policy hasto be dynamic taking into consideration the changing needs of industry in the context of thedomestic and global economic environment. It is, therefore, necessary to revisit the NationalMineral Policy, 1993, as provided, and to spell out in a revisedstatement the different elements of policy, including elements newly evolved, for thedevelopment of the mineral resources of the country.It is very necessary to introduce penal liability for illegal mining as the instances of illegal mining are increasing day by day

Sustainable Development Mining is closely linked with forestry and environment issues. A significant part of thenations 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 disturbthe ecological balance of an area. However, the needs of economic development make theextraction of the nations mineral resources an important priority. A framework of sustainabledevelopment will be designed which takes care of bio diversity issues and to ensure thatmining activity takes place along with suitable measures for restoration of the ecologicalbalance. Special care will be taken to protect the interest of host and indigenous (tribal)populations through developing models of stakeholder interest based on international bestpractice. Project affected persons will be protected through comprehensive relief andrehabilitation packages in line with the National Rehabilitation and Resettlement Policy.

Mining Policy: Objectives And Parameters

The basic objectives of the Mining Policy for major minerals are as under: -To develop and exploit mineral resources in a scientific and sustainable manner, taking into account the interest of the State, People and Environment. To facilitate exploration work for accurate reserve estimation of the mineral deposits.To review the existing practice of random exploitation of mineral resources and to regulate the same.To carry out geological mapping of mineral resources. To promote necessary linkages between mining and mineral industry.To regulate investment in mining and generate employment for local population. To promote research and development activities in major mineral sector.To ensure establishment of appropriate training facility for human resource development to meet the man power requirement of the major mineral industry.To minimize adverse effect of major mineral development on the environment and ecology through appropriate preventive and control measures.To ensure conduct of mining operation with due regards to safety and health of all concernedTo create a database on major mineral resources in the state.To take steps to promote geo-tourism.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.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.

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.

Economic Growth and DevelopmentIndia's emergence as a major economic hub has ensured steady growth across the BRIC nation's mining industry. Using detailed ICD Research we map the surging demand for minerals such as coal within an increasingly liberalized market.As a result of strong economic growth, the Indian mining industry increased at a compound annual growth rate (CAGR) of 11.1% during the 2004-09 period (the review period), to a value of more than US$20bn in 2009.

During the period of 2010-15 (the forecast period), the expansion of key end markets such as construction, infrastructure and power generation will continue to drive the demand for minerals.The mining equipment market is expected to grow from less than US$3bn in 2010 to US$4.5bn in 2015. The majority of demand will continue to be met by domestic equipment manufacturers, though the growing market will begin to attract foreign companies.

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.

The Indian government has increasingly liberalized its mining sector to encourage foreign direct investment (FDI). However, the government recently adopted an increase in mining royalties for minerals such as copper, zinc and lead.

The new system is designed to make assessment and collection simpler and enhance royalty accruals to state governments.

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 policies favor FDIThe Indian mining industry was largely under government control until 1993, when the government announced a new Mineral Policy opening the mining industry to FDI.

The Foreign Investment Promotion Board was established to consider FDI proposals on an individual case basis.

In accordance with the new policy, foreign equity is limited to 50% for participation in mining projects, and limited to 74% for participation in services relating to mining.

The policy was further relaxed in 1997, by allowing an 'automatic approval' route, and again in 2006, by allowing 100% FDI through this route in all metallic and non-metallic ores, with the exception of titanium.

In particular, captive coal and lignite attracted significant FDI, and are expected to continue to do so over the forecast period.

Domestic equipment manufacturers will meet a majority of demandThe mining equipment market is expected to grow from less than US$3bn in 2010 to US$4.5bn in 2015, at a CAGR of 10.0%. The majority of demand will continue to be met by domestic equipment manufacturers. However, the recent liberalization of the mining sector means it is likely the upgrade of mining equipment will result in investment opportunities for foreign equipment manufacturers.

REGULATION OF MINERALS Management of mineral resources is the responsibility of both the Central Governmentand the State Governments in terms of Entry 54 of the Union List (List I) and Entry 23of the State List (List II) of the Seventh Schedule of the Constitution of India. TheMines and Minerals ( Development and Regulation) Act, 1957 (MMDR Act), lays down thelegal frame-work for the regulation of mines and development of all minerals other thanpetroleum and natural gas. The Central Government has framed the Mineral ConcessionRules, 1960 (MCR) for regulating grant of reconnaissance permits (RP), prospecting licences(PL) and mining leases (ML) in respect of all minerals other than atomic minerals andminor minerals. The State Governments have framed the rules in regard to minor minerals.The Central Government have also framed the Mineral Conservation and DevelopmentRules, 1988 (MCDR), for conservation and systematic development of minerals. Theseare applicable to all minerals except coal, atomic minerals and minor minerals

The Central Government in consultation with State Governments shall formulate thelegal measures necessary for giving effect to the new National Mineral Policy, 2008, toensure basic uniformity in mineral administration across the country and to ensurethat the development of mineral resources keeps pace, and is in consonance with thenational policy goals. The MMDR Act, the MCR and the MCDR will be amended in line withthe policy. The regulation of mines and development of mineral resources inaccordance with the national goals and priorities as spelt out in the policy and the legalframework shall be the responsibility of both the Central and the State Governments.

In order to make the regulatory environment conducive to private investment theprocedures for grant of mineral concessions of all types, such as Reconnaissance Permits,Prospecting Licenses and Mining Leases, shall be transparent and seamless and security oftenure shall be guaranteed to the concessionaries. The first-in-time principle in the case of soleapplicants and the selection criteria in the case of multiple applicants will be appropriatelyelaborated. Prospecting and mining shall be recognized as independent activities withtransferability of concessions playing a key role in mineral sector development.

ROLE OF THE STATE IN MINERAL DEVELOPMENTThe role to be played by the Central and State Governments in regard to mineral developmenthas been extensively dealt in the Mines and Minerals (Development and Regulation) Act,1957 and Rules made under the Act by the Central Government and the State Governmentsin their respective domains. The provisions of the Act and the Rules will be reviewed andharmonised with the basic features of the new National Mineral Policy. In future the corefunctions of the State in mining will be facilitation and regulation of exploration and miningactivities of investors and entrepreneurs, provision of infrastructure and tax collection. In miningactivities, there shall be arms length distance between State agencies (Public SectorUndertakings) that mine and those that regulate. There shall be transparency and fair play in thereservation of ore bodies to State agencies on such areas where private players are not holding orhave not applied for exploration or mining, unless security considerations or specific publicinterests are involved.

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.