PRESENTATION ON OVERVIEW OF MM(DR ) ACT- 2015 AND ITS RELEVANCE TO MINOR

MINERAL CONCESSION RULES

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E M P R E SEnvironmental, Mine Plan & Resource Evaluation Solutions

E M P R E SNEW NO 49, OLD NO 23,UMAPATHY STREET,WEST MAMBALAMCHENNAI – 600 033,

TAMIL NADU

Minor Mineral Notification

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• Mining Industry is at the cusp of change and set to witness high degree of

activity to meet the demands along with a paradigm shift in the whole

gamut of issues relating to the development of the sector starting with

amendment of MMDR Act, Environmental, Forest, Wild life, Tribal and Land

Acquisition Acts and regulatory framework.

• In this context certain issues (related to the above changes) needs redressal

at the earliest

The Mines and Minerals (Development and Regulation) Act, 1957 has been

revised and both the houses has passed the Mines and Minerals Amendment

Act- 2015.

Though most of the major clauses of the original MMDR Act 1957 remain

unchanged, there are a few crucial additions which have been added with the

expectations of improving the mining laws of India and putting a check on illegal

mining and improving the lifestyle of the communities in and around

mining areas. The act has given rights to the state government for granting

mining lease while approvals and sanctions of the area are to be given by

Central Government on selected matters.

Minerals area divided into non coal/coal/Atomic minerals. Non coal minerals

are further divided into 2 categories namely Notified mineral and other

than Notified minerals.

Only 4 minerals iron ore, manganese ore, bauxite, limestone are presently

included as notified minerals.

The new MM(DR) Act 2015 introduces auctioning of areas for grant of mineral

concessions for proven reserves to enhance transparency in the grant of

Mining Leases in the Country.

Highlights of MM(DR) Amendment Act -2015

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Increases the period of lease to 50 years for fresh grant and extends the lease period to

50 years for the existing leases also.

Deemed extension to leases which has enjoyed 50 years by another five years i,e

upto 31.03.2015 in the case of non captive users and by 15 years i.e upto 31.03.2030 for

captive users.

Introduces a special fund called District Mineral Fund for improvement of the project

affected districts.

A trust called National Mineral Exploration Trust, with the objective of using

the fund for regional/detailed exploration is introduced.

Recommends setting up of special courts for hearing mining-related litigation and for

speedy redressal.

Though the passing of this act is being considered as a welcome change in a mining

sector which has been like a breeding ground for scams and controversies, there are a

few questions which are still causing concern among the mining community.

Highlights of MM(DR) Amendment Act -2015

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Minerals (Evidence of Mineral contents) Rules 2015

• Minerals (Evidence of Mineral contents) Rules 2015 have been issued by the Central

Government. The rules are applicable to all minerals except Petroleum & Natural Gas, Coal,

Lignite, sand for stowing, Minerals listed in Part B of the I schedule of MMRD and Minor

minerals.

• The degree and the level of Exploration carried out for reports not submitted before 12th Jan

2015 for the grant of RP, PL and ML are prescribed.

• Reconnaissance Survey (G4) to establish anomalous zones worthy of further exploration for

which /PL Grant is required. For grant of ML general level of exploration (G2) is required.

• For auctioning of mining lease for the area to be considered must have the exitance of mineral

content is atleast with general exploration G2 level, should be completed to establish indicated

Mineral Resource under 332.

• For grant of Mining leases though auction after the expiry of mining lease period or leases

surrendered, determined or lapsed detailed reassessment of resource shall be carried out in

accordance with general exploration i.e G2 level.

• For grant of composite prospecting license cum mining lease preliminary exploration under G3

level has to be completed to establish the Inferred Mineral Resources under 333.

• For the grant of Mining leases, atleast general level of exploration (G2) is required to establish

reserves in 332 category i.e Indicated Mineral Resource.

• Parameters for establishing the existence of mineral content in terms of quantity and grade are

specified in part II, III, IVA, IVB & V of the schedule

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Mineral (Auction) Rules 2015

• The Central Government vide GSR-406(E) dated 20.05.2015 have issued Rules for Mineral

(Auction) Rules 2015.

• Details of eligibility for participating in auction of mining lease and requirements along with terms

and condition of eligibility are specified.

• The powers Central Govt shall be exercised by the State Govt for reservation of particular mining

area for any particular end use and also the State Govt may earmark certain percentage of mines

for the end use.

• An auction shall be conducted through an online electronic auction platform. State Govt will

specify the minimum percentage of value of mineral to be dispatched know an as reserve prize.

• Bidding parameters are to be specified by the State Govt.

• The State Govt shall issue notice to invite tender, on their website, to commence the auction

process and such notice shall contain brief particulars regarding the area, estimated mineral

resources, land particulars i.e forest/revenue land and land not owned by the State Government

etc.

• The bidding will be carried out after expiry of the time specified in the document.

• Condition for the grant of mining lease include compliance with all terms and condition of

eligibility and other conditions, specified under rule 10

• Up front payment, performance security for mining lease payment is specified.

• Rules are also framed for grant of composite license.

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Minor Mineral Notification

• Ministry of Mines vide its notification S.O.423 (E) dtd 10.02.2015 has declaredthe following 31 minerals to be minor minerals in addition to the mineralsalready declared by notification as minor minerals under the said clause

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S.No Mineral S.No Mineral S.No Mineral i Agate Xi Dolomite Xxi Limekankar

ii Ball Clay Xii Dunite Or Pyroxenite XXii Mica

iii (Barytes Xiii Felsite XXiii Ochre

iv Calcareous Sand Xiv Felspar XXiv Porphyllite

v Calcite Xv Fireclay XXv Quartz

vi Chalk Xvi Fuschite Quartzite XXvi Quartzite

vii China Clay Xvii Gypsum XXvii Sand (Others)

viii Clay (Others) Xviii Jasper XXviii Shale

ix Corundum Xix Kaolin XXix Silica Sand

x. Diaspore XX Laterite XXX Slate

XXXI Steatite or Talc or Soapstone

Minor Mineral Concession Rules as prevalent in some states

• Minor Mineral concession rules are made under section 15 of MMDR Act by the all

the state Governments under delegation of powers.

• Minor Minerals included minerals used in the extraction and production of normally

construction material besides in some manufacturing units like clay for bricks, fuller

earth/bentonite in oil well drilling

• The list of minor minerals include sand, brick earth, ballast, Jelly laterite, morrum.

Rocks like Marble, Granite, dolerite, slate, used as ornamental/dimensional stones

are also included as minor minerals.

• As per the latest MMDR act of 2015, a list of 31 minerals are also included as minor

mineral namely quartz, Felspar, Barytes, dolomites, soapstone etc.

• After the inclusion of these 31 minerals, the state governments are preparing the

Minor Mineral Concession Rules which are yet to be published by many states.

• Normally the period of Grant of QL for sand, Ballast etc is for a period of 2 to 5

years. In the case of Marble & Granite (Dimensional stone) the period is 30years. In

Tamilnadu for stone quarrying (ballast, road metal) it is for 10 years (virgin areas)

and 5 years for other areas (earlier granted areas). For sand it is 1 to 3 years.

• Mining plan/ Scheme of Mining is mandated in all the states before grant of QL.

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Minor Mineral Concession Rules as prevalent in some states

• Environment clearance from SEIAA is essential for grant and working of QL.

• In patta lands, QL’s are granted to the Pattadar or the consent holder, for all minor

mineral.

• Renewal of QL is permitted normally for the period of original grant of the lease

period. In the case of granite and dimensional stone the renewal of the lease is

accorded for a period of 20 years.

• Permit has to be obtained before dispatch of minor minerals from the QL area.

collection centres are also established through a process of auctioning the

centres, as in Andhra Pradesh & Rajasthan.

• Penalties for illegal working and nonpayment of revenue is applicable in all

states.

• Minor Mineral Concession rules after the amendment of MMDR-2015, is being

prepared by the State government after including 31 minerals.

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Minor Mineral Concession Rules as prevalent in Tamilnadu

• The application for minor minerals are received by the Dept of Mines and Geology/ or

District Collector and disposed off by the Department or District collector within a

stipulated period

• For the disposal of QL for Granite or Marble, tendering and auctioning procedure is

adopted in Government lands.

• Maximum and Minimum extent for grant under QL is 1.00 hect to 50.00hect depending on

the establishment of Mineral based industries and the financial input for cutting and

polishing equipment(Granite and marbles).

• Transfer/surrender of QL is permitted in some states with the approval of the state

government.

• Normally the Dept of mines and geology grants the lease for minor minerals. In Tamilnadu

the grants are made by the District Collector and the state government in some cases

(Granite and Dimensional stone )

• The mining plans and scheme of mining is to be prepared by RQP who is recognized by

State government as in Andhra Pradesh, Rajasthan and Gujarat. In Tamilnadu RQP

recognized by IBM are preparing the Mining plans.

• Registration of QL deed is essential.

• Quarrying permits are granted by the District Collector in areas before leases are granted or

if there is no court case restraining any minor mineral for a quantity not exceeding 2000

cubic feet 10

Hurdles of Blue Metal Quarries

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i. For the safety of mine workers and the Quarry with proper benching and sloping

there is a need to fix a minimum area. For this the minimum lease area shall be not

less than 5 Hectares.

ii. For economical operation and sustainable production the lease period may be for a

period of 10 years minimum with a clause for renewal till the mineral is exhausted or

the ulitimate pit limit is (UPL) is reached.

iii. There shall be a time-frame fixed at different level for grant/renewal of mining /quarry

leases

iv. For effective control of pollution, due to stone-dust, a common crushing yard may be

located with proper/stipulated pollution control measures in areas where cluster

mines are in operation.

Small Mine Operations - Other than Blue Metal

• Recent amendments in MMDR Act 2015 are likely to cause hardships to smallmines being operated in the state of Tamilnadu for minerals like lime kankar,quartz, feldspar, different clays, gypsum, etc.

• Recent Environment Act amendments envisages new guidelines for grant ofmineral concessions which needs to be rationalized making it favourable toimplement in the existing small mines being operated in limited areas.

• In the MMDR Act – 2015, under schedule IV, as Notified minerals lime stonehas been included, where by the mineral concession for ML and PL Cum ML isto be disposed off by public auction. In this regard it is pointed out thatlimestone is used in various industries both in large and small scale sector.

• For limestone usage in fertilizer, wall paper, Glass, Soap, Pesticides andinsecticide, PVC, cem units, the leases are to be granted through public auctionas per the act. This puts a heavy pressure on the manufactures since thevolume of consumption of the mineral may not be large yet indispensible.

• These small mine operators are working in small areas of lease extent, rangingfrom 1 to 5 Ha for limestone which needs exemption from obtaining the leasethrough public auction.

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• Hence for limestone usage other than in Cement and Steel manufacturing, limestone, as‘Notified mineral’ needs an exemption and the areas needs to be granted on receipt ofapplication.

• A time-frame for processing and disposal of the applications for mining leases/PL atvarious levels of the state government will have to be spelt out as there is an impasse as ondate.

• The interest of surface right holders of small area lease holders shall be protected andgiven priority in granting lease. The Government may also consider the grant of leases inadjoining Government lands to avoid fragmentation and discontinuity of such leases.

• For small, isolated deposits with extents ranging between 1 Ha to 5 Ha, priority shall begiven to small mine operators having mineral based units for value addition includinglimestone leases.

• Hence forth the grant of leases for Minor minerals come under the preview of StateGovernment for which the State Government has to frame the rules under Tamil NaduMinor Mineral Concession Rules.

• We seek the Govt to issue rules and guidelines for grant / renewal of mineral concessionsfor Minor Minerals which are user friendly with guidelines for speedy disposal.

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Small Mine Operations - Other than Blue Metal

Minor Minerals

• Notification dt 10.02.2015 declared 31 Nos as Minor Minerals which while wereunder the Major Mineral category which was administered under MM(D&R)Act,1957 and MCR, 1960.

• Under Section 15 of MM(D&R) Amendment Act,2015, State Government ishaving powers to make rules in respect of Minor Minerals.

• However, it is observed that certain aspects of these Notifications need to beincorporated and amended appropriately in the existing T.N Minor MineralConcession rules 1959 so as to benefit the mining fraternity as well as forensuring that the basic doctrine of scientific mining and mineral conservation arenot lost sight.

• Consequent to the Notification dt 10.02.2015, the mining fraternity is lookingforward for the necessary amendments or /guidelines /procedures to be evolvedfor speedy disposal of Mineral Concession applications under the Minor MineralConcession Rules for mineral development. The amendment may include suitableguidelines for systematic and scientific approach to mineral development.

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• The mineral administration procedures needs to be specific and the authority for

granting such mineral concession (approvals for 31 nos. of minerals) which was

earlier administered under the MM(D&R) Act,1957 and MCR, 1960.

• As on date, neither the Department of Mines and Geology nor the Head of the

Districts seem to be aware of such empowerment to issue grant /approvals. There is a

void created as such.

• In the cases of mineral concessions already granted and operating for over 3 to 4

decades, consequent to the Notification dt 10.02.2015, it is necessarily required to be

administered under Minor Mineral concession rules and clarification is sought on the

following lines:

i) Payment /rate of Royalty / Seigniorage fee applicable.

ii) Extension of lease period shall be made applicable for the minerals

now declared as Minor Minerals in accordance with MMDR - 2015

iii) Authority for approval of Mining Plan /Scheme of Mining, hereafter

for the 31 nos. of Minor Mineral may be designated since the Indian

Bureau of Mines does not have the power for issuing approval for

Minor Minerals.

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Implication of Ministry of Mines Notification S.O.423(E)dt 10.02.2015

• Since most of the minerals now declared as Minor Mineral are being utilized asIndustrial Minerals or for value addition, the lease period, granting authority,seigniorage fee, approval authority for Mining Plan /Environmental Clearanceneeded are to be fixed by the State Govt for the fresh mineral concession applicationfor the 31 nos. of Minor Minerals.

• In case of mineral deposits /where more than one mineral occur like a) Lime Kankarand Limestone b) Limestone and Dolomite c) Limestone and Clay etc these mineralsare presently categorized as both as Minor Mineral and Notified Minerals . In suchcases the Government has to evolve Mineral Concession administration systemaccurately with out any ambiguity, for grant of MC and for smooth and scientificmining operation.

• In case of shallow deposits like Lime kankar, requiring more area to have sustainablereserves, the Govt shall grant the intervening poramboke lands with out affectingecological balance. If the intervening Govt lands is not considered for mineralconcession, then the area gets fragmented into no. of pieces, resulting in more leaseapplication and statutory clearances which puts additional burden on the industry.

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Implication of Ministry of Mines Notification S.O.423(E)dt 10.02.2015

• If the mineral is being utilized for captive industry or value addition, the lease periodshould for a period of 50 years.

• Provision shall be made for transfer of mineral concession in case of qualityrequirements /un-economic deposit/change of business interests etc.

• The process for grant of QL is invariably involving prolonged periods of time, followingwhich the applicant needs to seek EC clearance. Specific time period is to be fixed foreach of the clearances.

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Implication of Ministry of Mines Notification S.O.423(E) dt 10.02.2015