Reforms in mining sector proposed to make the sector investor friendly

Transfer of licenses, privileged rights for tribal cooperatives, fast clearance of mineral concession proposal and substantial increase in holdings are some of the proposals

The ministry of mines have come up with an action plan to expedite investment and technology in the mining sector which is witnessing a slump  due to closure on account of  illegal mining and  judgement of courts .

According to officials, mineral production is down and state governments are suffering due to loss of revenue on royalty and shortage of minerals for various industries. Besides the sector needs to be investment friendly and therefore transparency in the entire procedure of grant of mining concessions – that is the various types of leases by the states should be very transparent.

One of the major areas which are being worked out is facilitating easy commercial transfer of preliminary prospective mining permit s, otherwise known as reconnaissance permit (RP) or prospecting license to expert exploration companies by PSUs or original concession holders.   

Secondly, while the maximum area held by individual licensees  - either  full mining leases (ML) or prospecting license  (PL)  or preliminary mining  and survey ( reconnaissance permit )  is proposed to be increased substantially through additional surveys and notification of mining areas as per the Supreme Court guidelines, the government is also providing for preferential right for tribal cooperative  for small/ isolated deposits in clusters . This is to prevent exploitation of indigenous rights of inhabitation the mining areas.

 The reform plan was discussed with various mineral rich states – Goa, Karnataka, Chhattisgarh, Gujarat, Andhra Pradesh, Jharkhand, Odisha, and Maharashtra, Madhya Pradesh, Rajasthan, Tamil Nadu and telengana.  

 The reform plan includes framing transparent mining system, expedite clearances of mining leases, proposals for  environmental clearances ( EC) and forest clearances (FC),  fool proof tracking of transportation of iron ore using  RFID and GPS ( global positioning system), model code of  conduct  as per the MMDR Act ( Mines and Minerals  Development and Regulation Act) to control illegal mining , establishing computerized weigh bridges and modernisation of check posts to check under invoicing and  working out a transparent   and timely processing application for EC and FC.   

 As for measures to curb illegal mining, the state government have been asked to furnish quarterly reports and every state has been advised  to set up “Special Anti- Extortion and Anti Money laundering  cell” to prevent the nexus between illegal mining , forest contractors and extremists .

Due to heavy pendency , processing of mineral concession application have also taken priority as each state has been asked to send a self imposed timeline   for monitoring and processing of  such applications. The entire system of mineral concession is proposed to be made web based so that there would be time bound and prevent scope of illegal mining.  Officials explained this would put checks on sweeping powers of Union government and state government in issuing leases, fresh and renewal.  This is based on the mining tenement system (MTS)  which automates various processes involved in mineral concession regime - not only online filing of applications but identification of  areas available for  various types of mineral concessions.

While 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 or the Exclusive Economic Zone of India. The State Governments grant the mineral concessions for all the minerals located within the boundary of the State, under the provisions of the MMDR Act, 1957, and Mineral Concession Rules (MCR), 1960 framed there under. Under the provisions of the MMDR Act, 1957 and MCR, 1960, prior approval of the Central Government is required for some cases. There are three kinds of mineral concessions - Reconnaissance Permit (RP) granted for preliminary prospecting of a mineral through regional, aerial, geophysical surveys, Prospecting License (PL) for undertaking operations for the purpose of exploring, locating or proving mineral deposit and Mining Lease (ML) granted for undertaking operations for winning any mineral.