IAS Gyan

Daily News Analysis

LS passes MMDR amendment Bill  

20th March, 2021 Policy

Context: The Lok Sabha passed a Bill to amend the Mines and Mineral (Development and Regulation) Act (MMDR Act) through a voice vote.

 

Details:

  • The reform in the mining sector would generate 55 lakh direct and indirect jobs.
  • To enhance mining activity, the private sector with enhanced technology in mineral exploration will be allowed.
  • India produces 95 minerals and has the same potential like South Africa and Australia but the mining sector was under-explored and India still had to import minerals like gold and coal.
  • The mining sector right now contributes 75% to the country’s GDP but the proposed reforms will raise the contribution to 2.5% as it seeks to make a large number of mines available for auctions by resolving legacy issues.
  • The Bill removes the distinction between captive and non-captive mines and seeks to introduce an index-based mechanism by developing a National Mineral Index (NMI) for statutory payments.
  • The National Mineral Exploration Trust (NMET), to see the functioning of the sector, will be made an autonomous body.

 

About The Mines and Minerals (Development and Regulation) Amendment Bill, 2021:

 

The Bill amends the Mines and Minerals (Development and Regulation) Act, 1957.  The Act regulates the mining sector in India.

 

  • Removal of restriction on end-use of minerals: The Bill provides that no mine will be reserved for particular end-use.
    • The Act empowers the central government to reserve any mine (other than coal, lignite, and atomic minerals) to be leased through an auction for a particular end-use (such as iron ore mine for a steel plant). Such mines are known as captive mines. 
  • Sale of minerals by captive mines: The Bill provides that captive mines (other than atomic minerals) may sell up to 50% of their annual mineral production in the open market after meeting their own needs. The lessee will have to pay additional charges for minerals sold in the open market.
  • Auction by the central government in certain cases: The Bill empowers the central government to specify a time period for completion of the auction process in consultation with the state government. If the state government is unable to complete the auction process within this period, the auctions may be conducted by the central government.
    • Under the Act, states conduct the auction of mineral concessions (other than coal, lignite, and atomic minerals).
  • Transfer of statutory clearances: The Bill provides that transferred statutory clearances will be valid throughout the lease period of the new lessee.
    • In the Act, upon expiry of a mining lease (other than coal, lignite, and atomic minerals), mines are leased to new persons through auction. The statutory clearances issued to the previous lessee are transferred to the new lessee for a period of two years.   
  • Allocation of mines with expired leases: The Bill adds that mines (other than coal, lignite, and atomic minerals), whose lease has expired, may be allocated to a government company in certain cases.
  • Rights of certain existing concession holders: The Bill provides that the right to obtain a prospecting license or a mining lease will lapse on the date of commencement of the 2021 Amendment Act.
  • Extension of leases to government companies: The Bill provides that the period of mining leases of government companies (other than leases granted through auction) may be extended on payment of additional amounts prescribed in the Bill.
  • Conditions for lapse of mining lease: The Bill adds that the threshold period for lapse of the lease may be extended by the state government only once and up to one year.

 

https://www.thehindu.com/todays-paper/tp-national/ls-passes-mmdr-amendment-bill/article34114052.ece