UNIVERSITY OF PETROLEUM AND ENERGY STUDIES COLLEGE OF LEGAL STUDIES

LAW OF MINING ASSIGNMENT NEW MINERAL POLICY 2015

Submitted to:
Sr. TOBI THOMAS (UPES)

Submitted by:
ABHISHEK CHHABRA 500011974 B.A L.L.B Roll No. 5

PREAMBLE
Government of INDIA has considered it appropriate to promote proper use of huge mineral resources of the INDIA for sustainable economic development of its people and the nation as a whole by amending its existing mineral policy. To achieve this, it has been decided to simplify the rules and procedures so as to ensure scientific, safe and eco-friendly mining, productivity, conservation and cost-effectiveness, social commitment, zero waste mining, health and welfare of people. As a major resource for development the extraction and management of minerals has to be integrated into the overall strategy of the countrys economic development.

BASIC FEATURES
To develop and exploit mineral resources in a scientific and sustainable manner, taking into account the interest of the State, People and Environment. To facilitate exploration work for accurate reserve estimation of the mineral deposits. To review the existing practice of random exploitation of mineral resources and to regulate the same. To carry out geological mapping of mineral resources. To promote necessary linkages between mining and mineral industry. To regulate investment in mining and generate employment for local population. To promote research and development activities in major mineral sector. To ensure establishment of appropriate training facility for human resource development to meet the man power requirement of the major mineral industry. To minimize adverse effect of major mineral development on the environment and ecology through appropriate preventive and control measures. To ensure conduct of mining operation with due regards to safety and health of all concerned To create a database on major mineral resources in the state.

To take steps to promote geo-tourism. To promote private sector participation in various aspects of mineral development, which includes exploration, infrastructure building, mining and other mining related activities and mineral based industries.

To safeguard the rights of all stakeholders including rights of affected population.

REGULATION OF MINERALS
Management of mineral resources is the responsibility of the Central Government and the State Governments in terms of Entry 54 of the Union List (List I) and Entry 23 of the State List (List II) of the Seventh Schedule of the Constitution of India. The Mines and Minerals (Regulation and Development) Act, 1957 lays down the legal frame-work for the regulation of mines and development of all minerals other than petroleum and natural gas. The Central Government have framed the Mineral Concession Rules 1960 for regulating grant of prospecting licences and mining leases in respect of all minerals other than atomic minerals and minor minerals. The State Governments have framed the rules in regard to minor minerals. The Central Government have also framed the Mineral Conservation and Development Rules, 1988 for conservation and systematic development of minerals. These are applicable to all minerals except coal, atomic minerals and minor minerals. The Central Government in consultation with the State Governments, shall continue to formulate the legal measures for the regulation of mines and the development of mineral resources to ensure basic uniformity in mineral administration and to ensure that the development of mineral resources keeps pace, and is in consonance with the national policy goals. The regulation of mines and development of mineral resources in accordance with the national goals and priorities shall be the responsibility of the Central and State Governments.

ROLE OF THE STATE IN MINERAL DEVELOPMENT

The role to be played by the Central and State Governments in regard to mineral development has been extensively dealt in the Mines and Minerals (Development and Regulation) Act, 1957 and Rules made under the Act by the Central Government and the State Governments in their respective domains. The main functions in future of the state will be to provide the projects of mining with the information of latest technology that can be used to enhance exploitation of minerals. A proper facilitation in tax collection, exploration of minerals and exploiting them in the best scientific method that is available.

GOALS OF THIS NATIONAL MINERAL POLICY

Creation of improved regulatory environment to make it more conducive to investment and technology flows. Transparency in allocation of concessions. Development of proper inventory of resources and reserves. Enforcement of mining plans for adoption of proper mining methods and optimum utilization of minerals. Old disused mining sites will be used for plantation or for other useful purposes. Mining infrastructure will be upgraded through PPP initiatives. State PSU involved in mining sector will be modernized. State Directorate will be strengthened to enable it to regulate mining in a proper way and to check illegal mining. Use of machinery and equipment which improve the efficiency, productivity and economics of mining operation, safety and health of workers and others will be encouraged. More foreign direct investment so as to handle Risk Money. Proper sustainable development plans for the proper ecological balance. Latest technology should be used for exploitation of minerals with minimum wastage.

Towards Sustainable Mining and Mineral Conservation:Based on the broad objectives of the major mining policy the state shall go for a paradigm shift to ensure effective regulation and sustainable growth and development of mining in the state. Directorate of Mines and Geology shall undertake the following measures for promoting sustainable mining in the state and ensure fair and transparent regulatory regime.

To exploit geological potentials of the state on a scientific basis after due exploration and prospecting.

Development of a proper inventory of resources and reserves, a mining tenement registry, preparation of mineral atlas on priority.

State Directorate of Mining and Geology will be strengthened with man power, equipment and skills.

Mining is closely related to the forest and environment. A suitable framework will be designed to ensure mining along with suitable measures for restoration of the ecological balance that had been disturbed so far.

Value addition will be actively encouraged. Value addition will go hand in hand with the growth of the mineral sector as a stand-alone industrial activity.

The minerals have to be conserved for the future generations. Suitable infra-structure facilities to be created financed by user fee concept Wastage of natural resources will be prevented by amalgamating small deposits suitably.

The closure of mines has to be systematically planned and Ecological balance will be restored including utilization of existing pits for water conservation and harvesting of crops.

The fair share of revenues collection from minerals will be utilized to improve the standard of living of those residing in mining areas.

Take steps both regulatory and developmental to ensure zero tolerance to illegal mining of any kind.

Research and development in minerals will receive prime importance and a comprehensive institutional framework for R & D and training will be developed.

Pollution And Its Social Impact: Control of Pollution due to transportation and ground water preservation.

Polluter pays principle will be strictly engaged and applied while targeting the basic objective of prevention of pollution and in this regard suitable provisions would be included in the transportation rules including: Washing of tires of truck and other vehicles before exiting the mining lease area and entry on public road. Periodical cleaning of public roads by the agencies appointed by the state. Pollution Control equipments to be installed at set points at strategic locations between mining areas and unloading point. Regulatory fees to regulate the mechanism as stated above to be recovered from the mining lease holders. Ground water preservation : Utilization of ground water by the mining lessee in the lease area, for washing of ore, or for any other purpose including its drawl for excavation in cases where working of mines in terms of Environmental Clearance has gone below the ground water level to be fully regulated, controlled and monitored.

Dump Handling Policy:

For Effective Regulation of Dump and Stock Yards The tailings or dumps contain iron ore mined from the mining site after the recovery of marketable quality of ore by more or less effective recovery methods; the dumps still contain unrecovered iron ore. They are not simply discarded but kept for re-treatment as and when technology became available whereby the ore could be recovered economically and, sometimes, under circumstances where Export of the ore could not take place in times of economic depression. The dump material can be easily distinguished from the surface of the ground on which it is situated. Tailings dumps are enormous in size but despite their size they are distinguishable from the surface of the land and are capable of being removed without injuring the land; they are movables and could be treated as and when necessary and they do not get acceded to the land having been left there for a long period.

Welfare and Social Responsibilities:

To ensure active involvement of various agencies, organization, Institutions, Industries, etc engaged in mineral development sector in welfare and socioeconomic development of mineral bearing and its surrounding areas : The State Government will set up a Mineral Advisory Committee comprising of technical experts and professional Institutions to advise undertaking welfare and socio-economic development of mineral bearing and its surrounding areas. The Mine Leases would be required to provide health care, education, drinking water safe and hygienic conditions of living and welfare facilities to the mine workers and their families, as envisaged under the relevant labor laws. The mine Leases would be required to set up health facilities specially equipped to cater to the needs of women and children in and adjoining mining areas.

The Government shall make all out efforts through its administrative machineries or otherwise to prevent any type of child labor as envisaged in the prevalent Acts and Regulation in the country on the subject.

Defects Removed or Corrected In This Policy

Fundamental human rights were not being upheld, in that: Contrary to the right to environment, many people in the communities surrounding Ermelo live in an environment which is harmful to their health (deterioration in surfaceand groundwater resources from acid mine drainage impacting especially those households still reliant on rivers and streams for access to water; deterioration of air quality and the daily inhalation of PM10 dust, affecting young children in particular; increase in vehicular traffic and the concomitant risk of road deaths). Contrary to the right to environment, many people in the communities surrounding Ermelo live in an environment which is harmful to their well-being (contending daily with the visual, auditory and aesthetic disruptions associated with open cast and underground coal mining: Blasting, the endless drone of heavy machinery, a steady stream of coal-laden trucks and the relentless dust coating every living surface). Contrary to the right to have access to adequate housing and the rights of the child to shelter, many people in the communities surrounding Ermelo are finding that their existing access to housing is under threat.

Mining operations were not contributing to community and rural development in that:
Provision of municipal and provincial services access to water,removal of sewage and maintenance of the road network is being undermined by the rapid development of mining in the area. Contrary to the mining policy, not one of the respondents could report a tangible benefit to themselves flowing from the mining operations. The abundance of coal and coal waste is perpetuating reliance by the community on dirty energy which contributes to poor air quality and increases respiratory ailments.

Contrary to the notion of provision for all of an adequate livelihood base, the situation pertaining to mining around Ermelo seems to indicate that a few people are benefiting at the environmental cost of many. Contrary to the SDM programme, the extraction of value from South Africas coal resources is not benefitting vulnerable groups.

Government policy for FDI Foreign Direct Investment Policy

India possesses great potential of mineral resources. However, there exists considerable scope for augmenting the resource position by further exploration of known deposits and discoveries of new deposits, adopting state-of-the-art technology and modern methods like aerial reconnaissance or geophysical surveys. The geological and metallogenic history of India is similar to mineral rich Australia, South Africa, South America, and Antarctica , all of which formed a continuous landmass prior to the breaking up of Gondwanaland. It also has some features similar to the mineral rich Canadian shield of North America. Being aware of the vast potential of the sector, the Indian Government, has been consistently and in a pragmatic manner opening up the previously controlled regime to usher private investment in the sector and infuse funds, technology and managerial expertise. The opening up of the Indian mining sector has, therefore, generated considerable global interest. The Indian mining sector was opened up to Foreign Direct Investment in 1993 after the announcement of the New Mineral Policy. Initially, all proposals were considered on a case to case basis by the Foreign Investment Promotion Board (FIPB). FDI policy in the mining sector was further liberalized in January 1997 which opened up an automatic approval route for investments involving foreign equity participation up to 50% in mining projects, and up to 74% in services incidental to mining. The Foreign Direct Investment (FDI) policy in the mining sector has been gradually liberalized over the last few years. FDI cap for exploration and mining of diamonds and precious stones have been increased to 100% under the automatic route with effect from 10th February, 2006.

With this, the Foreign Direct Investment in the mining sector for all non-atomic and non-fuel minerals have now been fully opened up to 100% through the automatic route including diamonds and precious stones.

Relief & Rehabilitation of Displaced and Affected Persons

Mining operations often involve acquisition of land held by individuals including those belonging to the weaker sections. In all such cases a social assessment will be undertaken to ensure that suitable Relief and Rehabilitation packages are evolved. While compensation is generally paid to the owner for his acquired land, rehabilitation of affected persons in the form of substitute land, land for housing and jobs is not always adequate. In areas in which minerals occur and which are inhabited by tribal communities and weaker sections it is imperative to recognize resettlement and rehabilitation issues as intrinsic to the development process of the affected zone. Thus all measures proposed to be taken will be formulated with the active participation of the affected persons, rather than externally imposed. A careful assessment of the economic, environmental and social impact on the affected persons will be made. A mechanism will be evolved which would actually improve the living standards of the affected population and ensure for them a sustainable income above the poverty line. For this purpose, all the provisions of the National Rehabilitation and Resettlement Policy or any revised Policy or Statute that may come into operation, will be followed.

Penal Liability
It is very necessary to introduce penal liability for illegal mining as the instances of illegal mining are increasing day by day. Everyone should be punished for not following the provisions of the mining. It is very necessary for the development of the country.

Economic Growth and Development

Coal companies will have to share 26 per cent of their net profits with the project affected people. Miners of other major minerals such as iron ore and bauxite have to shell out an amount equal to the royalty paid to the States. This will be credited to the proposed District Level Mineral Foundation that would be utilized for the welfare of the project affected people. India's emergence as a major economic hub has ensured steady growth across the BRIC nation's mining industry. Using detailed ICD Research we map the surging demand for minerals such as coal within an increasingly liberalized market. As a result of strong economic growth, the Indian mining industry increased at a compound annual growth rate (CAGR) of 11.1% during the 2004-09 period (the review period), to a value of more than US$20bn in 2009. During the period of 2010-15 (the forecast period), the expansion of key end markets such as construction, infrastructure and power generation will continue to drive the demand for minerals. The mining equipment market is expected to grow from less than US$3bn in 2010 to US$4.5bn in 2015. The majority of demand will continue to be met by domestic equipment manufacturers, though the growing market will begin to attract foreign companies. While coal accounts for more than half of all Indian mining activity, iron ore dominates the metallic mineral category, accounting for four-fifths of this category's mining activity. Limestone accounts for three-quarters of Indian non-metallic mineral production. The Indian government has increasingly liberalized its mining sector to encourage foreign direct investment (FDI). However, the government recently adopted an increase in mining royalties for minerals such as copper, zinc and lead. The new system is designed to make assessment and collection simpler and enhance royalty accruals to state governments.

Strong growth in the Indian mining industry

As a result of strong economic growth, the Indian mining industry increased at a CAGR of 11.1% during the review period (2004-09), to value more than US$20bn in 2009. Total mineral

production grew at a CAGR of 7.6% in the same period, to reach an estimated 1.1 billion tons in 2009. During the forecast period (2010-15), the expansion of key end markets such as construction, infrastructure and power generation will continue to drive the demand for minerals. As a result, the Indian mining industry is forecast to produce more than 1.5 billion tons of minerals by 2015, growing at a CAGR of almost 6% during the forecast period. Increase in royalty rates will affect company revenue The Indian Government adopted an increase in mining royalties in August 2009 for minerals such as copper, zinc and lead. For instance, the government increased royalties on zinc ore from 6.6% to 8%, imposing a 10% value-added royalty on iron ore mining. For iron ore mining companies, the new royalty will mean switching to a tax regime under which the companies will be charged based on the market value of the minerals produced, rather than the existing system of flat rates based on volumes. The new system is designed to make assessment and collection simpler and enhance royalty accruals to state governments. However, the revised rates will also increase production costs for miners, depending on the value of the mineral. Coal dominates the Indian mining sector Coal was India's most valued mineral in 2009, accounting for half of the total mineral production. Iron ore dominates the metallic mineral category, with its total production valued at US$4.8bn in 2009. The non-metallic category is dominated by limestone, with its production valued at US$0.6bn in 2009, or 2.8% of the total Indian mineral production. While coal accounts for more than half of all Indian mining activity, iron ore dominates the metallic mineral category, accounting for four-fifths of this category's mining activity. Limestone accounts for three-quarters of Indian non-metallic mineral production.