The Indian Mining Regulatory Regime

India is home to the gifted production of 95 minerals, including four fuel-related minerals, ten metallic minerals, twenty-three non-metallic minerals, three atomic minerals, and fifty-five minor minerals. 1500 mines at various locations in the country serve as a source of raw materials for several major industries. The mining sector plays an essential role in the Indian economy. The central and state governments collectively govern the mining sector in India. The central government is empowered under the Union List to regulate mines and minerals to the extent that the parliament approves it as under public interest. The State List authorises the state government's actions for the mining industry, subject to the powers of the central government. The mining industry is quite vast and regulated by authorities like the Ministry of Mines, responsible for surveying and exploring all minerals except natural gas and atomic minerals. The Indian Bureau of Mines and the Ministry of Coal are also necessary regulatory authorities that are critical players in the development of the mining industry.


The primary regulation which governs the mining industry that is to be abided by the government is The Mines and Minerals (Development and Regulation) Act, 1957. It defines "minerals" as all minerals except natural oils. It describes various other terms such as mining lease, mining operations, minor minerals, etc. The Act authorises for a "mining lease," which means a lease granted for undertaking mining operations and includes a sub-lease given for such purpose. It allows for a prospecting license which means a permit granted to prospect operations to explore or prove mineral deposits. Another allowance is for a reconnaissance permit, which allows for functions which are undertaken for "preliminary prospecting of a mineral through regional, aerial, geophysical or geochemical surveys and geological mapping, but does not include pitting, trenching, drilling (except drilling of boreholes on a grid specified from time to time by the Central Government) or sub-surface excavation." It categorises minerals into major and minor minerals. Building stones, gravel, ordinary clay, ordinary sand, and other minerals declared by the Central Government form the minor minerals. Minerals that are not categorised under this category, such as coal, manganese ore, and iron ore, are known as significant minerals. This Act went through amendments in 2015, 2016, and recently in 2021.


The changes brought by the 2015 Amendment were fundamental. They were about establishing a transparent and non-discretionary regime for grants of mineral concessions, which are a crucial aspect of mining. The 2016 Amendment changed the Act to allow the transfer of mining leases used for captive consumption purposes and granted other than through auction.


The latest revelations through the 2021 Amendment have brought various changes that aim to include private sector enterprises. The amended Act removes the restrictions on the end-use of minerals, allows captive mines to sell 50% of their annual production in the open market as per their convenience, bringing a turn in the usual methods of sale and purchase. It also permits the transfer of statutory clearances and the auction by the central government in some instances. The rights of concession holders have also been enhanced, along with the extension of leases for government companies. It, along with several other changes, removes the provision for reconnaissance permits.


This Act serves as the primary guiding factor for the mining regulatory regime, yet it is incomplete without the effectiveness of several other regulations. Which are:


Mineral Concession Rules, 1960: These provide essential functions such as maintaining accounts and reports to the state government, rejecting applications, granting concessions, etc.


Mineral Conservation and Development Rules, 2017 (the MCD Rules): The conditions necessary for maintaining that mining is undertaken upon a scientific basis while also keeping in mind the environmental concerns is the primary approach of these rules.


Mineral (Auction) Rules 2015 (Auction Rules): The grants and concessions that take place for minerals administered through the process of an online auction process are to abide proceedings by these rules.


The Mines Act contains provisions for labour safety, working conditions, management of mining operations, etc.


Mines Rules: These formulate the framework for ensuring the safety and health of employed labourers in the mines.


Offshore Areas Mineral (Development and Regulation) Act, 2002 (OAMDR Act): The development in offshore areas in maritime zones regarding minerals is undertaken to implement these rules.


Offshore Areas Mineral Concession Rules, 2006 (OAMDR Rules) govern the grant and renewal of concessions in offshore mineral areas.


Mines and Minerals (Contribution to District Mineral Foundation) Rules, 2015: Specifications as to the preferred amount for payment by the holder of a mining lease or license are inscribed in these rules.


Coal Block Allocation Rules, 2017: The ideal auction terms for the allotment of coal blocks by competitive bidding are governed by these rules and regulations.


Despite the vast number of legislations, what usually lacks is implementation. Some subjects are no longer in accordance with current times and thus, require to be updated. Including private entities is a bold yet futuristic step for further development to become more transparent and positive for the nation. Such actions will play to the nation's strengths, as it still holds untapped areas for precious minerals such as gold. The steps spearheaded by the 2021 Amendment depict the increasing aspirations of the nation to stand on its own as a globally robust economy. Ensuring natural resources lead to immediate and independent access to raw materials, strengthening the Indian industries, enhancing exports, and reducing imports. The hope for a capable and developed country rests on steps highlighting the developmental capability and visions coupled with actions.


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