India: Govt amends mineral concession rules

The government has amended the mineral concession rules so as to implement the changes it had brought in the Mines and Minerals (Development and Regulation) Act, 1957, in a notification dated 2Nov’21.

The changes made under Minerals (Other than Atomic and Hydro Carbons Energy Mineral) Concession (Fourth Amendment) Rules, 2021 cover the following areas:

• PSU mines: All leases granted to a government company or corporation before the 12 June amendment to MMDR, 2015 shall be deemed to have been granted for a period of 50 years as long as the application for extension is made three months before the expiry of the lease, and provided the state government condones the delay in such an application. If the extension is not disposed of, the period of that lease shall be deemed to have been extended until the state grants extension. The government company or corporation is to pay the state government an amount additional to NMET and DMF etc, as NMDC did in Karnataka.
• Transfer of ECs/FCs: Now environment and other clearances from ex-lessee to new lessee will happen in a week, hastening vesting orders provided the new lessee does not want any changes to the conditions of these approvals (granted to the previous lessee). This transfer of permits was earlier provided for two years only.
• Sale from captive mines: A captive lessee, having consumed 50%of its material at the end-use plant linked to the mine, will be allowed to sell up to 50% of the total mineral produced during a financial year. The lessee will have to pay an additional amount for these sales reconciled at the end of the financial year.
• Dumps and waste: The amended rules will allow for overburden, waste rock, or low-grade ore (below the threshold value) to be sold with permission from the state government which will have to consult with the Indian Bureau of Mines and on payment (premium) decided by the state.
• Production and dispatch: A change that might affect MDPA configurations is the replacement of “mining operations” by “production and dispatch.” Where a new lessee is unable to start production and dispatch within a period of two years (from the date of execution of lease) he can seek a one-time, three-month extension.
• Transfer of leases: Rule 24 has been amended and Rule 23 too which allows a transfer in favour of legal heirs of a lessee which the government can carry out within a period of 90 days of receiving such application.
• Easing of geological exploration data to expedite auction of areas: This has been done by allowing to-be-auctioned areas to be valued, in the absence of average sale price (ASP) of the said mineral in that area for that month by taking the last ASP published and if there is none available for the previous 12 months, by considering the all-India ASP of the mineral.
• The amendment replaces “prospecting licence-cum-mining lease” with “composite licence”.
• Where exploration data of G3 required for composite licenses is unavailable, an estimated quantity of mineral resources assessed under G4 level will be allowed. This estimate helps set the price for the security deposit of the mineral area. In the absence of any exploration data the deposit will be benchmarked against the mineralisation of a nearby lease explored up to G3 level.
• Minimum area for grant of mining lease: Two hectares have been set as a minimum area in respect of beach sands or placers, which are mono or multi-mineral concentrations, including the dunes. The same will apply to areas for limestone, bauxite, manganese, kyanite, sillimanite, marl, selenite, siliceous earth, graphite, etc with 4 hectares set as a minimum for all other mineral deposits.
• Deadlines: When the last day of any submission is a public holiday or non-working Saturday or Sunday, the applicant can make his submissions/payments before the next working day.
• Penalties: Contraventions of rules can attract imprisonment for a term of up to two years or a fine extending to INR 500,000  or both, and in the case of a continuing contravention an additional fine extending to INR 50,000 for every day of such a contravention after conviction of the first violation.Link to the notification