President Pranab Mukherjee on 12 January 2015 gave his assent to an ordinance that amends the Mines and Minerals Development and Regulation (MMDR) Act, 1957. The ordinance paves way for introduction of competitive bidding for allocation of mines of iron ore and other non-coal minerals.
Earlier, the promulgation of ordinance to amend the MMDR Act, 1957 was approved by the Union Cabinet on 5 January 2015. The ordinance route was taken by the Union government after it was not able to introduce the Mines and Minerals (Development and Regulation) (Amendment) Bill, 2014 in the winter session of the Parliament in December 2014.
Objective of the MMDR (Amendment) Bill, 2014
• Improved transparency in the allocation of mineral resources
• Obtaining for the government its fair share of the value of such resources
• Attracting private investment and the latest technology
• Eliminating delay in administration, so as to enable expeditious and optimum development of the mineral resources of the country
Main Provisions of the MMDR (Amendment) Bill, 2014
• It seeks to differentiate between bulk, surficial minerals and difficult to access minerals and prescribe different procedures for the same.
• Bulk minerals such as Iron ore, Limestone, Manganese, Bauxite etc., have been proposed to be notified, will account for 85 per cent or more of the value of mineral production in India.
• On the other hand, deep seated and difficult to access minerals have been proposed to be non-notified minerals.
• As far as non-notified minerals are concerned, the Bill seeks to grant a combined Prospecting Licences-cum-Mining Lease for these minerals through a competitive bidding process. The scheme envisages that the successful bidder will conduct the exploration and prospecting work at his own risk and cost.
• It seeks to increase the maximum areas permitted for prospecting licences and mining leases up to the extent specified in the lapsed MMDR Bill, 2011.
• It provides for competitive bidding by auction as the method to be followed for allocation of Mining Leases (MLs) in respect of notified minerals so as to bring both transparencies in allocation as well as to ensure a fair share of the value of minerals for the government.
• It proposes that there need not be any Reconnaissance Permits (RPs) or Prospecting Licences (PLs) issued for notified minerals.
• In case there are any gaps in the required knowledge related to notified minerals, they will have to be filled up by the State agencies themselves. This procedure is in line with recommendations of the High-level Committee on National Mineral Policy (Hoda Committee).
• It seeks to provide authority to the Union Government to pass orders even in cases where authorities entrusted with the powers under the Act fail to pass orders within the time limits prescribed therefore.
• It also empowers the Union Government to issue directions to State Governments for the conservation of mineral resources, on any policy matter in the national interest, and for the scientific and sustainable development and exploitation of mineral resources.
• It seeks to make the offence of illegal mining in respect of notified minerals a cognizable offence so as to deter illegal mining.
• The Bill also enable State Governments to set up special courts for trial of offences under the Act, if felt necessary.
• It empowers Union government to prescribe the Terms and Conditions for conduct of auctions both in respect of notified minerals as well as non-notified minerals.
• It also empowers Union Government to prescribe different Terms and Conditions for auctions of different types of minerals and their application to different States.
• It proposes to set up a District Mineral Foundation (DMF) in every district affected by mining
About District Mineral Foundation (DMF)
• It will be set up by State Government as a non-profit body in every district affected by mining.
• It will be funded by an additional levy related to royalty, the rate of which will be prescribed by the Central Government in case of minerals other than minor minerals
• In case of other minerals, the DMF shall be funded by such percentage of the royalty paid during the financial year as may be prescribed by the State Government
• The aim of DMF is to earmark funds for benefit of persons affected by mining as also for the rebuilding of infrastructure in mining affected areas
• The composition and functioning of the District Mineral Foundation shall be regulated in such manner as may be prescribed by the State Government
What: signed by President
When: on 12 January 2014