MMDR act,1957: Provisions related to Reconnaissance Permit, Prospecting Licence and Mining Lease ( section 6 – section 8A)
- Area for Reconnaissance, Prospecting and Mining
- Period of granting and renewing licenses
- Minerals other than coal, lignite and atomic minerals
Section 6 of the MMDR says that, no person can acquire:
- More than twenty-five square kilometers of land through one or more prospecting licenses, or
More than ten square kilometers of land through one or more mining leases.
Additionally, a single reconnaissance permit cannot cover an area larger than ten thousand square kilometers.
However, if the Central Government believes that it is necessary for the development of a specific mineral or industry, it can increase the maximum area limits for prospecting licenses or mining leases, but this decision must be in writing and state the reasons. - You cannot acquire any mineral rights for an area that is not continuous or compact, meaning the land is scattered or not connected. However, the State Government has the authority to permit the acquisition of mineral rights for non-compact or non-contiguous areas if they believe it is necessary for the development of a specific mineral, and they must provide written reasons for granting such permission.
- If a person acquires a mineral right on behalf of another person but intends to benefit from it themselves, it will be considered as if they acquired it for themselves.
- When determining the total area allowed for mineral rights, any area already held by a person as part of a cooperative society, company, corporation, Hindu undivided family, or partnership will be subtracted from the maximum allowed area. This means that a person cannot hold more than the specified maximum area individually or in combination with others.
The periods for granting and renewing licenses related to mining activities:
According to sec 7 and sec 8 of the MMDR act, 1957:
A reconnaissance permit or prospecting licence can be granted for a maximum period of three years.
If the State Government believes that more time is needed to complete prospecting operations, they can renew the prospecting licence for a specific period or multiple periods.
However, the total duration of the prospecting licence, including renewals, cannot exceed five years.
For certain minerals mentioned in the First Schedule (Parts A and B), the renewal of a prospecting licence requires prior approval from the Central Government.
Mining Leases:
These rules apply to minerals specified in Part A of the First Schedule.
- The maximum period for which a mining lease can be granted is thirty years.
- The minimum period for a mining lease should not be less than twenty years.
- A mining lease can be renewed for a maximum period of twenty years, subject to the previous approval of the Central Government.
Additional Notes: - For government companies or corporations, the duration of mining leases, including existing ones, will be determined by the Central Government.
The Central Government can amend the prescribed durations and payment amounts through notifications in the Official Gazette. - If coal or lignite is used for captive purposes, a lessee (lease holder) can sell up to fifty percent of the total coal or lignite produced after meeting the requirements of the linked plant. Specific conditions and additional payments apply.
- The Central Government can modify the percentage of coal or lignite that can be sold by a government company or corporation through notifications. Certain restrictions apply to the sale of coal from mines allotted to companies that have won power projects through competitive bidding. The Central Government can amend the related schedules through notifications, specifying the effective dates and reasons for modification.
Minerals other than coal, lignite and atomic minerals
Section 8A applies to minerals other than coal, lignite, and atomic minerals mentioned in the First Schedule.
- From the start of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, all mining leases will be granted for a period of fifty years.
- Mining leases granted before the Mines and Minerals (Development and Regulation) Amendment Act, 2015 will also be considered as granted for a period of fifty years.
- After the lease period expires, the lease will be put up for auction according to the rules specified in the Act. However, the state governments can initiate the auction process before the lease period ends.
- If a mineral is used for captive purposes (i.e., for the lessee’s own use), the lease period granted before the Mines and Minerals (Development and Regulation) Amendment Act, 2015 will be extended until March 31, 2030, or for fifty years from the grant date, whichever is later, as long as all lease conditions are met.
- If a mineral is used for purposes other than captive use, the lease period granted before the Mines and Minerals (Development and Regulation) Amendment Act, 2015 will be extended until March 31, 2020, or for fifty years from the grant date, whichever is later, as long as all lease conditions are met.
- When the lease period expires and an auction is held, a leaseholder using the mineral for captive purposes has the right of first refusal to participate in the auction.
- A lessee (leaseholder) using the mineral for captive purposes may sell up to fifty percent of the total mineral produced in a year after meeting the requirements of the associated plant. Additional payment specified in the Sixth Schedule is required for such sales. The Central Government can increase this percentage for government companies or corporations and amend the Sixth Schedule as necessary.
- The Central Government has the authority to prescribe the lease periods for mining leases, including those of government companies or corporations. For leases other than those granted through auction, the lease period can be extended by paying the additional amount specified in the Fifth Schedule. The Central Government can also amend the Fifth Schedule as needed.
