Centre proposes amendment to boost state revenue from mining waste

State governments stand to potentially benefit from revenue generated by mining waste as the mines ministry has proposed to amend the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 (MCR, 2016).

The proposed amendment to Rule 12(1)(k) of the MCR, 2016, would allow the dispatch of materials, such as overburden, waste rock, and minerals below a certain threshold value that cannot be used as a major mineral, in the normal course of mining, potentially enabling the government to generate revenue.

Rule 12(1)(k) of the MCR, 2016, outlines terms and conditions for a mining lease, including provisions for disposing of such materials below a certain threshold value that cannot be used as a major mineral.

The ministry has opened the floor for comments and suggestions on the draft amendment till December 13. 

The existing regulation permitted the leaseholder to dispose of these materials without specifying their intended use. The disposal process was required to be conducted in an environmentally and community-friendly manner. This could encompass storing the materials in assigned areas, employing them for land reclamation post-mining, or selling them to entities capable of utilising them. 

This ambiguity on these materials’ intended use possessed a risk where lessees could suggest disposing of minerals below the threshold value, yet the intended use might categorise it as a mineral other than a minor mineral (i.e., major mineral). Such actions could result in potential revenue losses for State Governments. 

To mitigate this risk, the proposed amendment seeks to clarify Rule 12(1)(k) for the disposal of minerals of inferior quality, overburden, waste rock, and minor minerals obtained from a mine. 

It suggests if the intended use of such minerals is as a mineral other than a minor mineral (i.e., major mineral), then instead of seeking permission under Rule 12(1)(k), the lessee should produce and dispatch such mineral in the normal course of mining. 

Major minerals are economically significant, extensively used in various industries, and have high market value (e.g., iron ore, coal). Minor minerals are less economically important and are used in localised industries with limited market value (e.g., sand, gravel). 

This clarification would require reflecting the same in the mining plan and in monthly and annual returns.