National Mineral Policy 2006 - Department of Mines

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• Rates of dead rent should be rationalised so that they act as an effective deterrentagainst a mine owner who does not undertake mining as per the approved mining planand prefers to keep large areas idle and keeps the mineral resources undeveloped. Inother words, an escalating scale of dead rent should be worked out. This should bestringently applied to captive miners and PSUs as well. [6.26]• The state governments would get revenues from the disposal of the ore bodies thathave been explored earlier at public expense by an open tender/auction system asexplained in Chapter 1. [6.26]• Transfer fees should be levied on PLs and MLs sought to be transferred. Asmentioned in Chapter 1, the unbundling of prospecting from mining is likely to bringin investment in the form of FDI into prospecting along with advanced technology.When the PL or ML of a prospected area is transferred for a premium by aprospecting firm in favour of a mining firm or if the firm itself is taken over oracquired by a mining firm for a consideration, a transfer fee as a percentage of thepremium or consideration may be levied. Such a step would be in line withinternational practice. The rates of transfer fee should be suggested by the next studygroup set up for making recommendations on royalty rates. [6.26]OTHER ISSUESRAISING FUNDS FOR PROSPECTING• The Ministry of Finance (Department of Economic Affairs) in consultation with SEBIand the major stock exchanges should examine the possibility of providing a specialdispensation for mining sector companies on the lines of ASX and AIM and TSX’sTVE so that investment in prospecting companies is encouraged. ASX-type assistanceby way of improving investor communications, equity research, and appropriate indexsupport to the mining sector would help attract private equity funds to this sector. Thesectoral focus of private equity, including venture capital, and the financial marketsgenerally is at present on identified emerging growth sectors, viz. IT, ITeS, media,telecom, lately commercial real estate, etc. With excellent growth potential appearingon the horizon on account of the new mining dispensation it is imperative that the216
fund-raising environment for prospectors and miners moves in step to bring about thegrowth of mining. [7.14]ALLOCATION OF CAPTIVE MINES TO STEEL MAKERS• On the basis of current assumptions of demand and supply of iron ore in the countryand of the growth in both, India would have enough resources to last until the end ofthe twenty-first century and there is no basis for basing policy changes on theexhaustion of these resources in the near future. However, the position would need tobe kept under review and adjustments made in it in light of the emerging situationfrom time to time. The first review should take place after a period of 10 years, i.e. in2016–17. [7.34]• Stand alone mining and captive mining should continue to co-exist in the country. Theposition should be reviewed in 2016–17 in light of the emerging situation ofestablishment of steel capacity in the country, on the one hand, and accretions to thelevel of iron ore resources in the country, on the other. A view can be taken at thattime on whether the balance of advantage in the grant of LAPL/PL/ML should bechanged in favour of steel mills. [7.47]• Through appropriate changes in Section 11(3)(d) it should be clarified that in asituation of multiple applications for grant of iron ore LAPL/PL/ML, the existinginvestment in steel plants that have exhausted their current captive mines should be aconsideration. However, the applicant must independently qualify under other criteria,including Section 11(3)(a) relating to prior experience. This is necessary to ensureefficient mining. [7.47]• Existing captive mines should be renewed if they have complied with the conditionsof the lease and the life of the steel plant so warrants taking into account existing andplanned capacities. In the case of new capacities, the recommendations of Chapter 5will apply. [7.47]• Steel making capacities already in existence on 1 July 2006 that do not have captivemines may also be given preferential allocation of adequate iron ore reserves withinthe state without the need to go through the process of tender/auction, as a one-time217
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National Mineral PolicyReport of th
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ContentsAcronyms...................
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Annexure 5: Using the GRI Guideline
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GDP gross domestic productGIS Geogr
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UNFCUSVATWCUUnited Nations Framewor
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Introduction1. The Government of In
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issues relate to fund raising by pr
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termination of MLs, lowering of cei
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• In the case of large mining ope
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investment. The work done by GSI co
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mainly for minerals of base metals
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1.21 This situation has changed dra
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absent. A study by the United Natio
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example, a mining major may outsour
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would otherwise remain unexploited
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the policy environment must continu
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‘A thrust is to be given to explo
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In reviewing the MMDR Act, it is ne
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permissible activities in order to
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(i)(ii)(iii)(iv)The current two-tie
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per plan should be significantly hi
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Duration of Concessions1.48 In the
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10,000 sq. km in a state. This has
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(ii)(iii)(iv)The maximum total area
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e obviated if the lease deed is exh
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elinquishment of areas by the lesse
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to give priority to the prior appli
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(v)(vi)(vii)Rules should be prescri
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esponsible for all rights, liabilit
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ut also the revenue generated from
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government at the Secretariat. A le
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Secretary. If the Directorate is in
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(i) All applications for mineral co
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application. A similar website shou
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concerned State Government (or othe
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Further, Rule 7D of the MCR specifi
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mission mode through, inter alia, t
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Chapter 3Forest Conservation and En
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conservation. There are trade-offs
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ICMM AND SDF3.8 The ICMM membership
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higher level. The basic approach is
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(i) To minimize displacement and to
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affected PAPs in the mining operati
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that a well-regulated and responsib
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(iii)Notwithstanding the above, sur
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egard, all ‘forest’ land must b
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Figure 3.1: Procedure for Processin
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should be authorised to grant or re
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formulation and appraisal of the EI
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3.41 Recognising the need to make t
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Figure 3.3: Public Hearing/NOC from
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Chapter 4Infrastructure Needs and F
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4.5 Logistics is the key to access
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Table 4.1: Mineral Production in In
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necessary, therefore, that in infra
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to the ports of Haldia and Paradip
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Connectivity of Major Ports, brough
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(iv)(v)(vi)(vii)At Visakhapatnam Po
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was of the opinion that while the m
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such an arrangement, the Ministry o
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developed, controlled, and run by s
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subject to overt and covert restric
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consideration to the end use of the
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(iii)parameters laid down in existi
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Chapter 6Augmenting State Revenues(
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the value addition question conside
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In a system of ad valorem rates of
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must provide revenues sufficient to
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Box 6.1: Methods of Valuation of Ro
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Another point to be borne in mind b
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ailable, cognisable criminal offenc
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e worked out. This should be string
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7.3 Considering the high-risk natur
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Table 7.2: Minimum Listing Requirem
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(ii)(iii)only. Such funds have not
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addition, the minimum post-issue fa
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and hence this ore should be conser
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miners distort the market for their
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7.22 The current law does not make
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is mostly of low grade magnetite. H
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Most magnetite findings are entirel
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in UK 206 kg, and in China it grew
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metres. The use of down hole drill
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7.42 Despite the fact that SME mini
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also be a consideration. However, t
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price, reduce profitability, and pu
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IMPACT ON DOMESTIC IRON ORE PRICES
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Page 178 and 179: POLICY ON BEACH SAND MINERALS7.64 B
Page 180 and 181: not contain more than 0.1 per cent
Page 182 and 183: 7.73 On 18 January 2006, the DAE no
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Page 186 and 187: India enterprise) reported that the
Page 188 and 189: chloride process pigment technology
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Page 192 and 193: directed to ensure that the AERB/AM
Page 194 and 195: would have to be carefully drafted
Page 196 and 197: ‘In coordination with the Geologi
Page 198 and 199: Exploration Licences• The current
Page 200 and 201: • The fees should be significantl
Page 202 and 203: surveys have been undertaken, the P
Page 204 and 205: automatic until the exhaustion of t
Page 206 and 207: y stating in the MMDR Act that a pr
Page 208 and 209: departmental representative for sec
Page 210 and 211: therefore (under Rule 63A), pass su
Page 212 and 213: • Section 12(1) of the MMDR Act s
Page 214 and 215: o The lessee should not be asked to
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Page 218 and 219: • As in the past, no environmenta
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Page 224 and 225: next three-year period as well. In
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Page 230 and 231: • In respect of three titanium be
Page 232 and 233: No-I&M-25(3)/2005Government of Indi
Page 234 and 235: No-I&M-25(3)/2005Planning Commissio
Page 236 and 237: ‘Efforts would also be made to gr
Page 238 and 239: ecommending amendments to the Act a
Page 240 and 241: etained as a Prescribed Substance u
Page 242 and 243: OthersShri Arvind VarmaEx-Secretary
Page 244 and 245: 16. Reserve Bank of India17. M/s Ji
Page 246 and 247: the RP holders in areas beyond 25 s
Page 248 and 249: Appendix ERecommendations of the Ex
Page 250 and 251: (1) Provide proximate and strategic
Page 252 and 253: technology to enter the Indian stee
Page 254 and 255: Cross-country Comparison of Mining
Page 256 and 257: Appendix F (cont.)Country Mining La
Page 258 and 259: Cross-country Comparison of Mining
Page 260 and 261: Appendix G (cont.)Country Mining le
Page 262 and 263: CountryAppendix H (Cont.)Environmen
Page 264 and 265: AustraliaIndonesia 9 4 Not specifie
Page 266 and 267: Annexure 1 (cont.)Geologicalenviron
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Page 270 and 271: B. After Rule 54 of the Mineral Con
Page 272 and 273: the Central Government to entertain
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We most humbly request that the abo
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Annexure 4The 2002Sustainability Re
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While unique in its coverage and pr
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• facilitate comparability• add
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AssuranceJust as investors look to
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The Guidelines are structured in fi
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There are many aspects relevant for
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- Issues in which community partici
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Annexure 7Royalty Accruals on Miner
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Sl.No.MineralAnnexure 8 (cont.)2003
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Annexure 91 THE SECOND SCHEDULE 1(S
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(v) Group V Coals:(a) Non-Coking Co
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23. Iron Ore:(i) Lumps:(a) with 65
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45. Tin Five per cent of London Met
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International Comparison of Royalty
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Production, Consumption, Exports, a
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National Mineral Policy 2006 - Department of Mines

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