E M P R E S PRESENTATION ON OVERVIEW OF MM(DR ) ACT AND ITS RELEVANCE TO MINOR MINERAL CONCESSION RULES

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1 E M P R E S Environmental, Mine Plan & Resource Evaluation Solutions PRESENTATION ON OVERVIEW OF MM(DR ) ACT AND ITS RELEVANCE TO MINOR MINERAL CONCESSION RULES E M P R E S NEW NO 49, OLD NO 23, UMAPATHY STREET, WEST MAMBALAM CHENNAI , TAMIL NADU 1

2 Minor Mineral Notification 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 2

3 Highlights of MM(DR) Amendment Act The Mines and Minerals (Development and Regulation) Act, 1957 has been revised and both the houses has passed the Mines and Minerals Amendment Act 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. 3

4 Highlights of MM(DR) Amendment Act 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 in the case of non captive users and by 15 years i.e upto 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. 4

5 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 12 th 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 5

6 Mineral (Auction) Rules 2015 The Central Government vide GSR-406(E) dated have issued Rules for Mineral (Auction) Rules 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. 6

7 Minor Mineral Notification Ministry of Mines vide its notification S.O.423 (E) dtd has declared the following 31 minerals to be minor minerals in addition to the minerals already declared by notification as minor minerals under the said clause 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 7

8 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. 8

9 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. 9

10 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

11 Hurdles of Blue Metal Quarries 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. 11

12 Small Mine Operations - Other than Blue Metal Recent amendments in MMDR Act 2015 are likely to cause hardships to small mines 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 of mineral concessions which needs to be rationalized making it favourable to implement in the existing small mines being operated in limited areas. In the MMDR Act 2015, under schedule IV, as Notified minerals lime stone has been included, where by the mineral concession for ML and PL Cum ML is to be disposed off by public auction. In this regard it is pointed out that limestone is used in various industries both in large and small scale sector. For limestone usage in fertilizer, wall paper, Glass, Soap, Pesticides and insecticide, PVC, cem units, the leases are to be granted through public auction as per the act. This puts a heavy pressure on the manufactures since the volume of consumption of the mineral may not be large yet indispensible. These small mine operators are working in small areas of lease extent, ranging from 1 to 5 Ha for limestone which needs exemption from obtaining the lease through public auction. 12

13 Small Mine Operations - Other than Blue Metal 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 of application. A time-frame for processing and disposal of the applications for mining leases/pl at various levels of the state government will have to be spelt out as there is an impasse as on date. The interest of surface right holders of small area lease holders shall be protected and given priority in granting lease. The Government may also consider the grant of leases in adjoining 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 be given to small mine operators having mineral based units for value addition including limestone leases. Hence forth the grant of leases for Minor minerals come under the preview of State Government for which the State Government has to frame the rules under Tamil Nadu Minor Mineral Concession Rules. We seek the Govt to issue rules and guidelines for grant / renewal of mineral concessions for Minor Minerals which are user friendly with guidelines for speedy disposal. 13

14 Minor Minerals Notification dt declared 31 Nos as Minor Minerals which while were under the Major Mineral category which was administered under MM(D&R)Act, 1957 and MCR, Under Section 15 of MM(D&R) Amendment Act,2015, State Government is having powers to make rules in respect of Minor Minerals. However, it is observed that certain aspects of these Notifications need to be incorporated and amended appropriately in the existing T.N Minor Mineral Concession rules 1959 so as to benefit the mining fraternity as well as for ensuring that the basic doctrine of scientific mining and mineral conservation are not lost sight. Consequent to the Notification dt , the mining fraternity is looking forward for the necessary amendments or /guidelines /procedures to be evolved for speedy disposal of Mineral Concession applications under the Minor Mineral Concession Rules for mineral development. The amendment may include suitable guidelines for systematic and scientific approach to mineral development. 14

15 Implication of Ministry of Mines Notification S.O.423(E)dt 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, 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 , 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) iii) Extension of lease period shall be made applicable for the minerals now declared as Minor Minerals in accordance with MMDR 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. 15

16 Implication of Ministry of Mines Notification S.O.423(E)dt Since most of the minerals now declared as Minor Mineral are being utilized as Industrial Minerals or for value addition, the lease period, granting authority, seigniorage fee, approval authority for Mining Plan /Environmental Clearance needed are to be fixed by the State Govt for the fresh mineral concession application for the 31 nos. of Minor Minerals. In case of mineral deposits /where more than one mineral occur like a) Lime Kankar and Limestone b) Limestone and Dolomite c) Limestone and Clay etc these minerals are presently categorized as both as Minor Mineral and Notified Minerals. In such cases the Government has to evolve Mineral Concession administration system accurately with out any ambiguity, for grant of MC and for smooth and scientific mining operation. In case of shallow deposits like Lime kankar, requiring more area to have sustainable reserves, the Govt shall grant the intervening poramboke lands with out affecting ecological balance. If the intervening Govt lands is not considered for mineral concession, then the area gets fragmented into no. of pieces, resulting in more lease application and statutory clearances which puts additional burden on the industry. 16

17 Implication of Ministry of Mines Notification S.O.423(E) dt If the mineral is being utilized for captive industry or value addition, the lease period should for a period of 50 years. Provision shall be made for transfer of mineral concession in case of quality requirements /un-economic deposit/change of business interests etc. The process for grant of QL is invariably involving prolonged periods of time, following which the applicant needs to seek EC clearance. Specific time period is to be fixed for each of the clearances. 17