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Rajya Sabha passes Mines and Minerals Bill

The bill however, might be unconstitutional and could be challenged in the Supreme Court

BS Reporter  |  New Delhi 

With the Rajya Sabha’s assent to the Mines and Minerals (Development and Regulation) Amendment Bill, 2015, (MMDRA) Bill 2015, Parliament has just passed a Bill that might be unconstitutional and could be challenged in the Supreme Court, MPs warned.

The Opposition, led by the Left parties and seconded by the Congress, won an initial moral victory when the chair ruled in their favour that they were right in asking for the bill to be referred to a Select Committee again.

However, the victory was short lived as the entire House, barring the Left and the Congress, voted in favour of the bill, thus making it a law, although, in the course of the short debate, lawyer and nominated MP KTS Tulsi, CPI-M MP P Rajeeve and others said there were at least three rulings of the Supreme Court that had established that the State Governments had rights over mines as well as the land on which the mines were located. The previous laws said that for the development of any mineral, the central government could permit a person to acquire one or more licenses or leases covering additional area. The Ordinance amends this provision to allow the central government to increase the area limits for mining, instead of providing additional leases. This effectively curtails the power and control of the state government. However, what the new law also does is transfer more royalties to the state, which was a powerful and persuasive argument for states like Jharkhand and Odisha. Although both the Jharkhand Mukti Morcha and the Biju Janata Dal are otherwise opposed to the government, they supported the motion on the ground that it would bring more revenues to the state.

The government was also aided by the strategic walkout of the Janata Dal United and Rashtriya Janata Dal who warned, in the course of the debate that not only had the Select Committee not heard the views of the state government which were an important actor in the process of extracting minerals from the earth, but also, they had asked for, but not got the views of the Attorney General, whose advice needed to have been sought on whether the new bill infringed on the rights of state governments.

Congress MP Mani Shankar Aiyar said the Upper House of Parliament had not been visualized by the makers of the constitution as the House that would end up violating the constitution.

The immediate effect of the MMDR Bill 2015 will be the following:

  • To create a new category of mining license i.e. the prospecting license-cum-mining lease, which is a two stage-concession for the purpose of undertaking prospecting operations (exploring or proving mineral deposits), followed by mining operations
  • Change the area of mining, by allowing the Central Government to extend the area limits of mining, instead of providing multiple mining leases
  • In the earlier law, a mining lease was granted for a maximum of 30 years and a minimum of 20 years and could be renewed for a period not exceeding 20 years. Under the new law, the lease period for coal and lignite remains unchanged.

    For all minerals other than coal, lignite and atomic minerals, mining leases will be granted for a period of 50 years. All mining leases granted for such minerals before the Ordinance shall be valid for 50 years. On expiry of the lease, instead of being renewed, the leases shall be put up for auction, as specified in the Act

  • The state governments will grant mining leases for notified minerals and prospecting license-cum-mining leases for other minerals. It shall also notify geographic areas and the terms and conditions of such leases. All such leases shall be granted through auction by competitive bidding, including e-auction
  • The central government shall prescribe the terms and conditions, and procedure for auction, including parameters for the selection of bidders. For mining leases, the central government may reserve particular mines for a specific end use and allow only eligible end users to participate in the auction, if found necessary

First Published: Fri, March 20 2015. 14:36 IST