MINING SECTOR IN INDIA

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 MINING SECTOR IN INDIA

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• The story: Legislative Framework: In the federal structure of India, the State Governments are the owners of minerals located within their respective boundaries. The Central Government is the owner of the minerals underlying the ocean within the territorial waters upto the Exclusive Economic Zone (EEZ) of India. 

1. Entry at serial No. 23 of List II (State list) to the Constitution of India states, ‘Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union.’ 
2. Entry at serial No. 54 of List I (Central list) to the Constitution of India states, ‘Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest.’ 
3. The Mines and Minerals (Development and Regulation) (MMDR) Act, 1957: To provide for the development and regulation of mines and minerals resources.
4. The Mines and Minerals (Development and Regulation) (MMDR) (Amendment) Act, 2015: The 1957 MMDR Act was overhauled by amendment in 2015, to bring in greater transparency, remove discretion and infuse greater ease of doing business

• IBM: The Indian Bureau of Mines (IBM) was established in 1948 as a multi-disciplinary government organisation under the Department of Mines, Ministry of Mines. It is engaged in promotion of conservation, scientific development of mineral resources and protection of environment in mines other than coal, petroleum & natural gas, atomic minerals and minor minerals. IBM has six technical divisions with its HQ at Nagpur. 
• National Mineral Policy, 2019: It replaced the National Mineral Policy 2008 and due to a Supreme Court judgment dated 02.08.2017. The aim of NMP 2019 is to have a more effective, meaningful and implementable policy that brings in further transparency, better regulation and enforcement, balanced growth. Its features are

1. introduction of Right of First Refusal for RP/PL holders,
2. encouraging the private sector to take up exploration,
3. auctioning in virgin areas for composite RP-cum-PL-cum ML on revenue share basis,
4. encouragement of merger and acquisition of mining entities and 
5. transfer of mining leases and creation of dedicated mineral corridors to boost private mining.

• National Mineral Exploration Policy (NMEP), 2016: India has a huge potential for mineral resources. Investment flow for mineral exploration was less, and largely carried out by Government agencies viz. Geological Survey of India and Mineral Exploration Corporation Limited. The MMDR Amendment Act, 2015 brought significant changes related to mineral exploration, like the grant of mining leases (ML) and prospecting license-cum-mining lease (PL-cum-ML) only through auction process. The NMEP aims towards accelerating mineral exploration, by attractive provisions for inviting private investment in mineral exploration through revenue sharing model.
• Start rating of Mines: The Ministry of Mines is implementing the Sustainable Development Framework (SDF) in mining, and has evolved a system of Star Rating of Mines. It is a two-tier system providing self-evaluation templates to be filled in by the mine operator followed by validation through IBM. Rating is from 1 to 5. 
• GIS: The Geological Survey of India (GSI), founded in 1851, is one of the oldest survey organisations in the world which conducts geological surveys of India. It is the second oldest survey in India after Survey of India (founded in 1767). The GSI (geology) as well as ASI (archaeology), BSI (botany), FiSI (fisheries), FSI (forests), IIEE (ecology), NIO (oceanography), RGCCI (population survey) and language survey), SI (cartography), and ZSI (zoology) are key national survey organisations of India.
• Mining Surveillance System: The MSS is a satellite-based monitoring system which aims to establish a regime of responsive mineral administration by curbing instances of illegal mining activity through automatic remote sensing detection technology. The Ministry of Mines & Indian Bureau of Mines (IBM) developed it, with assistance from Bhaskaracharya Institute for space applications and Geo-informatics (BISAG), Gandhinagar and Ministry of Electronics and Information Technology (MEITY).
• PM KHANIJ KSHETRA KALYAN YOJANA (PMKKKY)
• (Translation – PM Minerals sector welfare scheme)
• What it is: The Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) is a 2015 scheme by Ministry of Mines for the welfare of people & affected areas by using the funds accrued under District Mineral Foundation (DMF).
• Philosophy: The main objective is (a) to mitigate the negative impacts during the mining processes (and thereafter), on the environment, health and socio-economic conditions of people in mining districts and (b) to ensure sustainable livelihood for the affected people. (Activities under "polluter pays principle" cannot be included under PMKKY)
• Objectives: The focus is on the lower strata of society, including tribals and forest-dwellers who are affected due to mining activities.

1. To implement various developmental and welfare projects/programs in mining affected areas that complement the existing ongoing schemes/projects of State and Central Government.
2. To minimize/mitigate the adverse impacts, during and after mining, on the environment, health and socio-economics of people in mining districts.
3. To ensure long-term sustainable livelihoods for the affected people in mining areas. Care has been taken to include all aspects of living, to ensure substantial improvement in the quality of life. 
4. Create a supportive and conducive living environment, balance funds will be spent on ‘other priority areas’. 

• Priority areas: 

1. At least 60% the fund will be utilized for "High Priority Areas" like: Drinking water supply, Environment preservation & pollution control measure, Health care, Education, Welfare of women and children, Welfare of aged & disabled people, Skill development, Sanitation
2. Rest of the funds are for "Other Priority Areas": Physical infrastructure, Irrigation, Energy & watershed development, Measures for enhancing environmental quality

• 2020 Reforms 
• The Mineral Laws (Amendment) Bill, 2020 was introduced in Lok Sabha on March 2, 2020. The Bill amends the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) and the Coal Mines (Special Provisions) Act, 2015 (CMSP Act). An Ordinance with similar provisions was promulgated on January 10, 2020.  The MMDR Act regulates the overall mining sector in India. The CMSP Act provides for the auction and allocation of mines whose allocation was cancelled by the Supreme Court in 2014.  Schedule I of the Act provides a list of all such mines; Schedule II and III are sub-classes of the mines listed in the Schedule I.  Schedule II mines are those where production had already started then, and Schedule III mines are ones that had been earmarked for a specified end-use. 

1. Removal of restriction on end-use of coal: Currently, companies acquiring Schedule II and Schedule III coal mines through auctions can use the coal produced only for specified end-uses such as power generation and steel production. The Bill removes this restriction on the use of coal mined by such companies.  
2.  Eligibility for auction of coal and lignite blocks: The Bill clarifies that the companies need not possess any prior coal mining experience in India in order to participate in the auction of coal and lignite blocks. 
3.  Composite license for prospecting and mining: Separate licenses are currently provided for prospecting and mining of coal and lignite, called prospecting license, and mining lease, respectively. Prospecting includes exploring, locating, or finding mineral deposit. The Bill adds a new type of license, called prospecting license-cum-mining lease. This will be a composite license providing for both prospecting and mining activities.
4.  Transfer of statutory clearances to new bidders: Currently, upon expiry, mining leases for specified minerals (minerals other than coal, lignite, and atomic minerals) can be transferred to new persons through auction.  Thisnew lessee is required to obtain statutory clearances before starting mining operations.  The Bill provides that the various approvals, licenses, and clearances given to the previous lessee will be extended to the successful bidder for a period of two years.   
5. Reallocation after termination of the allocations: The CMSP Act provides for the termination of allotment orders of coal mines in certain cases. The Bill adds that such mines may be reallocated through auction or allotment as may be determined by the central government.  
6. Prior approval from the central government: Under the MMDR Act, state governments require prior approval of the central government for granting reconnaissance permit, prospecting license, or mining lease for coal and lignite. The Bill provides that prior approval of the central government will not be required in granting these licenses for coal and lignite, in certain cases.

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