College of Legal Studies

Assignment on
MINERAL POLICY 2015

Submitted to:
Mr. Toby Thomas,
Assistant Professor (Selection Grade)
College of Legal Studies, University of Petroleum & Energy
Studies, Dehradun
Submitted byLoveleen Singh
BA LLB 6th sem
Sec-a
Roll no-65
500012007

MINERAL POLICY 2015

Minerals are a valuable natural resource being the vital raw material for infrastructure,
capital goods and basic industries. 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. The exploitation of minerals has to be guided by long-term
national goals and perspectives. Just as these goals and perspectives are dynamic and
responsive to the changing global economic scenario so also the national mineral policy has
to be dynamic taking into consideration the changing needs of industry in the context of the
domestic and global economic environment. It is, therefore, necessary to revisit the National
Mineral Policy, 1993, as provided, and to spell out in a revised
statement the different elements of policy, including elements newly evolved, for the
development of the mineral resources of the country.
It is very necessary to introduce penal liability for illegal mining as the instances of illegal
mining are increasing day by day
Sustainable Development
Mining is closely linked with forestry and environment issues. A significant part of the
nations known reserves of some important minerals are in areas which are under forest cover.
Further, mining activity is an intervention in the environment and has the potential to disturb
the ecological balance of an area. However, the needs of economic development make the
extraction of the nations mineral resources an important priority. A framework of sustainable
development will be designed which takes care of bio diversity issues and to ensure that
mining activity takes place along with suitable measures for restoration of the ecological
balance. Special care will be taken to protect the interest of host and indigenous (tribal)
populations through developing models of stakeholder interest based on international best
practice. Project affected persons will be protected through comprehensive relief and
rehabilitation packages in line with the National Rehabilitation and Resettlement Policy.
Mining Policy: Objectives And Parameters
The basic objectives of the Mining Policy for major minerals are as under: 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.
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 tyres 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.
Economic Growth and Development

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.
Government policies favor FDI
The Indian mining industry was largely under government control until 1993, when the
government announced a new Mineral Policy opening the mining industry to FDI.
The Foreign Investment Promotion Board was established to consider FDI proposals on an
individual case basis.
In accordance with the new policy, foreign equity is limited to 50% for participation in mining
projects, and limited to 74% for participation in services relating to mining.
The policy was further relaxed in 1997, by allowing an 'automatic approval' route, and again in
2006, by allowing 100% FDI through this route in all metallic and non-metallic ores, with the
exception of titanium.
In particular, captive coal and lignite attracted significant FDI, and are expected to continue to do
so over the forecast period.
Domestic equipment manufacturers will meet a majority of demand
The mining equipment market is expected to grow from less than US$3bn in 2010 to US$4.5bn
in 2015, at a CAGR of 10.0%. The majority of demand will continue to be met by domestic
equipment manufacturers. However, the recent liberalization of the mining sector means it is
likely the upgrade of mining equipment will result in investment opportunities for foreign
equipment manufacturers.
REGULATION OF MINERALS
Management of mineral resources is the responsibility of both 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 ( Development and Regulation) Act, 1957 (MMDR Act), 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 has framed the Mineral Concession
Rules, 1960 (MCR) for regulating grant of reconnaissance permits (RP), prospecting licences
(PL) and mining leases (ML) 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 (MCDR), 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 State Governments shall formulate the
legal measures necessary for giving effect to the new National Mineral Policy, 2008, to
ensure basic uniformity in mineral administration across the country and to ensure
that the development of mineral resources keeps pace, and is in consonance with the
national policy goals. The MMDR Act, the MCR and the MCDR will be amended in line with
the policy. The regulation of mines and development of mineral resources in
accordance with the national goals and priorities as spelt out in the policy and the legal
framework shall be the responsibility of both the Central and the State Governments.
In order to make the regulatory environment conducive to private investment the
procedures for grant of mineral concessions of all types, such as Reconnaissance Permits,
Prospecting Licenses and Mining Leases, shall be transparent and seamless and security of
tenure shall be guaranteed to the concessionaries. The first-in-time principle in the case of sole
applicants and the selection criteria in the case of multiple applicants will be appropriately
elaborated. Prospecting and mining shall be recognized as independent activities with
transferability of concessions playing a key role in mineral sector development.
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 provisions of the Act and the Rules will be reviewed and
harmonised with the basic features of the new National Mineral Policy. In future the core
functions of the State in mining will be facilitation and regulation of exploration and mining
activities of investors and entrepreneurs, provision of infrastructure and tax collection. In mining
activities, there shall be arms length distance between State agencies (Public Sector
Undertakings) that mine and those that regulate. There shall be transparency and fair play in the
reservation of ore bodies to State agencies on such areas where private players are not holding or
have not applied for exploration or mining, unless security considerations or specific public
interests are involved.
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.