Panel to meet soon to decide Rules for Mining Ordinance

The panel is headed by chief controller of mines, Indian Bureau of Mines, will have its first meet on January 22

A panel appointed by the Government of India to frame Rules for the Mines and Minerals - MMDR (Development & Regulation) Amendment Ordinance, 2015 is scheduled to meet on January 22 to deliberate on the Rules for the new mining law.

"The panel is headed by the chief controller of mines, Indian Bureau of Mines (IBM). The panel would have its first meeting on January 22. The mandate of the panel is to frame Rules for the new Ordinance on mining. Although, the exact Rules are yet to be decided, one of the key areas will be mineral exploration," said a top state official.

The Ordinance that came into effect on January 12, does away with the provision of renewal of mining leases and instead, has inserted clause to provide lease for a period of 50 years, contrary to 30 years mentioned in the earlier law. After completion of the lease period, the lease will be put up for auction again.

In the previous law, the state governments had powers to recommend or reject renewal applications of miners. Unlike the previous MMDR Act, there would be no renewal of any mining concession.

Since the mining industry was aggrieved over huge pendency in grant of second and subsequent renewals, sub-section 5 and 6 of Section 8 (a) of the Ordinance provides that the mining leases would be deemed to be extended from the date of their last renewal to March 31, 2030 (in the captive miners) and till March 31, 2020 (for the merchant miners) or till the completion of the renewal already granted, if any, whichever is later.

In the Ordinance, there is provision to establish District Mineral Foundation (DMF) in the districts where mining takes place. This is designed to address the long-time grievance of the civil society with people affected by mining are not cared for. There is separate provision for contribution to the DMF not exceeding one-third of the royalty rate in the respective minerals.

The Ordinance has also proposed to set up a National Mineral Exploration Trust created out of contribution from the mining lease holders. This would allow the government to have a dedicated fund for undertaking exploration. In addition, the transferability provision (in respect of mining leases to be granted through auction) would permit flow of greater investment to the sector and increasing the efficiency in mining.