THE MINERAL LAWS AMENDMENT ACT, 2020

Author: Richa Bohra, 2nd Year, BBA LL.B (H), Amity Law School, Amity University Rajasthan The article has been written by the author while pursuing the internship programme with us. INTRODUCTION: The bill Mineral Law Amendment,2020 was introduced in Lok Sabha on Mar 02, 2020, and was subsequently passed on Mar 08, 2020 in Lok Sabha and on Mar, 10,2020 in Rajya Sabha respectively. The tradition of mining is followed since ancient times and with the passage of time changes have been made in the process of mining. The mining industry in India is one of the heavily regulated industries which has been contributing to GDP 1.63% in 2018-19, which was earlier 1.93% in 2012-13. Despite producing 729 million tonnes of coal in 2018-19, India is largely dependent upon imports. The imports have increased, and it is 4.3 times higher than the one produced in the domestic country. The said bill has been passed in order to remove certain difficulties faced by the mining industry, therefore amending the provisions of Mines and Minerals (Development and Regulation) Act, 1957 (the “MMDR Act”) and the Coal Mines (Special Provisions) Act, 2015 (the “CMSP Act”). BACKGROUND: Since 2014, there were ninety-nine auctions, which had attracted only twenty-nine bidders as there was restriction regarding the participation in the bid previously, but the same has been removed and through amendment, they are trying to enhance the exploration and participation of bidder. In 2019, 100% foreign direct investment had been permitted in coal mining, it tried to provide liberalization on the restriction which had been imposed but due to the list mentioned under Schedule I, II & III of Coal Mine Act, 2015 and Mines and Mineral Act,1957 it restricted the investors from investing because of the overexploitation of mineral resources. The Coal and Mining Minister, Mr Prahlad Joshi said, “we have to produce coal and reduce imports”[1]there is a need to enhance domestic production and to reduce the dependency on imports which amounts to $30.71 billion (INR 2.7 Lakh crore of coal. [1] He also stressed on personal as well as environment safety. A “sea change” would be noted by focusing more on exploring resources and reserves along with no harm to the environment. The Government of India has given clearance to ten new coal mining projects;[2] which henceforth shows that a step has been taken ahead for the purpose of increasing the production of coal by providing fast track mining lease and thus leading to “ease in doing business”. SALIENT FEATURES OF THE BILL: ● Increased Role of private entities Amendments to Section 11A of the Mines and Minerals (Development and Regulation)Act have alleviated restrictions on the character of entities who could also be granted permits through e-auction. Bidding for intelligence permits, prospecting license-cum-mining lease and mining lease for coal and coal is currently hospitable to all corporations in spite of finished use. Before the 2015 change, the Mines and Minerals (Development and Regulation) Act solely allowed permits to be granted to public sector entities or corporations concerned in the production of iron/steel, power generation, coal, laundry and alternative prescribed uses. In 2015, permits might be granted to corporations that apply mining operations in Asian countries (India) and applied coal mining for its own consumption, sale or alternative functions as allowed by the permit. However, this ordinance may be a sharp departure because of removal of the provision which would only allow the existing companies to stick with the coal mining operations across the country [3] such as Coal India Limited[CIL] [4] and its subsidiaries), permits might currently be granted to any company or junior venture. Consequently, the eligibility criteria to participate in such bidding below the Special Provisions Act stands altered. Section 4(3)[5] [2] of C[6] oal Mines (Special Provisions) Act that provided for captive coal block auction has been omitted. The modification clarifies that to participate within the auction of coal and brown coal blocks, corporations don’t ought to have previous coal mining expertise in the Republic of India. Additionally, [7] the discriminatory bidding method for auctioning coal and brown coal blocks doesn’t touch mines thought of for allocation to foremost,[8] a government company or its venture for own use, sale or the other outlined purpose; and second, an organization that has been awarded an associate electricity project on the idea of a competitive tariff provider. ● Removal of “end- use of coal” restriction Presently, corporations getting coal mines underneath Schedule II and Schedule III through auctions might solely use the coal extracted for specific end-use functions like power generation and production. The amendment lifts this restriction and allows the corporations to take part in coal mining operations for his or her own personal use, sale, or for any other purpose, as specified by the central government [9] . Further due to the amendments[3] made in S.11A of the MMDR Act and S. 4(2) of the [10] C[11] oal Mines (Special Provisions) Act, the criteria that only companies that were previously engaged in coal mining operations, were entitled to bid for reconnaissance, prospecting or mining permits has been removed, thus setting up new players to the field area. [12] There has been omission of Section 4(3)[4] of C[13] oal Mines (Special Provisions) Act which lead to end of restriction regarding end-use of coal[5]. [14] ● Merger of licences: Presently, to prospect and mine coal, two licences are provided, referred to as prospecting and mining licence respectively. [15] However, a third [16] type of licence is added [17] by this modification which has the tenant to prospect and mine coal, known as the “prospecting license-cum-mining lease”. It is “a two stage concession granted for the purpose of undertaking prospecting operations followed by mining operations”[6] for a specified area. The holders of non-exclusive reconnaissance permits for the invention of known minerals don’t presently have the power to accumulate a prospecting license or mining lease. Reconnaissance [18] operations embrace initial prospecting of a mineral by bound surveys. The modification provides that holders of those permits will apply for a license-cum-mining lease or mining lease for prospecting functions. This clause shall touch all licensees as arranged down within the modification. ● Transfer of Statutory clearance to new bidders: Upon the end, mining leases for minerals (minerals apart from iron, lignite, and atomic minerals) can typically be passed to new [19] individuals by auction. These new individuals[20] (lessee) are expected to get statutory clearances before mining operations start. The modification specifies that for a term of 2 years, the assorted permits, licenses and clearances granted to the previous tenant shall be transferred to the effective bidder. ● Approval from the Union Government: In some cases the Coal Mines (Special Provisions) Act permits for the termination of coal mining allotment orders. The modification adds that these mines could also be reallocated by auction or allocation as the central government will decide. A delegated protector would be named by the central government to manage those mines till they’re reallocated. The bill stated that the approval of the union government is not required where there is granting of license for coal and lignite – a)the mining blocks are reserved & b) allocation done by the union government. ● Advance auctioning: State governments under the S.8A(4)[7] of Mines & Minerals (Development & Regulations) Act have to take action in advance for auction of mining lease before the expiry of license . At the end of the lease term, mining leases for listed minerals (minerals apart from iron, Iignite, and atomic minerals) square measure auctioned underneath the Mines and Minerals (Development and Regulation) Act. The modification provides that before its end, state governments will take advance action to auction a mining lease. SIGNIFICANCE OF THE BILL: ● Increase in FDI: The bill has put an end to the Coal India limited (CIL) monopoly and thus increased the participation of the private sector, which would boost the investment thus leading to reduction in imports. Due to the increase in domestic production of the coal, it would definitely reduce the dependency on import. Further 100 percent FDI can benefit the sector in the long run through increased technology adoption and mechanisation in mining operations thereby helping achieve better operational efficiency for the industry (the demand in the other sectors would also increase such as in mining equipment) . The Government has decided to achieve the goal of 1.5 billion tonnes of domestic coal by 2023-24, achieving the said target would ultimately lead to reduction of the import of coal. ● Liberalisation: The amendment helped to take a step ahead towards liberalisation of the mining sector as the eligibility criteria (no need to have prior experience in the field of coal mining in the country) for the purpose of participating in auction has been liberalised and further the removal of the end use of the coal , has led to wider participation. Further global players who look for investment would lead effective utilisation of natural resources. CONCLUSION: The mineral law amendment act 2020 is a remarkable decision and is much appreciated. Since many countries are moving away from fossil fuels due to climate, India is taking steps ahead in this field although risking the environment but trying to reduce the import as well as achieving the target of 1.5 Million tonnes of domestic goal by 2023-24. Though the amendments are aimed towards promoting simple doing business and making certain continuous supply of minerals to industries, each of those shall eventually cut back the import quantities. These changes will also cause a rise in the participation and can facilitate the implementation of the FDI policy during this sector. REFERENCES [1] Parliament passes law to open the coal sector for commercial mining, The Economics Times, Mar 12, 2020.
https://economictimes.indiatimes.com/industry/indl-goods/svs/metals-mining/parliament-passes-law-to-open-coal-sector-for-commercial-mining/articleshow/74593504.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst.

[2] THE COAL MINES (SPECIAL PROVISIONS) ACT, 2015, No. 11,Act of Parliament,2015(India).

[3] Amended by Sections 7 and 10 of the Ordinance, respectively. It may be noted that Section 4(2) is only applicable to Schedule I coal mines. [4] supra note.2. [5] Under Section 3(v) of the CMSP Act, ‘specified end-use’ has been defined as “any of the following end-uses and the expression “specified end-user” shall with its grammatical variations be construed accordingly,– (i) production of iron and steel; (ii) generation of power including the generation of power for captive use; (iii) washing of coal obtained from a mine; (iv) cement; (v) such other end-use as the Central Government may, by notification, specify; (w) “vesting order” means the vesting order issued under section 8”. [6] Section 3(ga) of the Mines and Minerals (Development and Regulation) Act. [7] Section 8A(4) of the MMDR Act reads as follows: “On the expiry of the lease period, the lease shall be put up for auction as per the procedure specified in this Act”.

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