National Mineral Policy 2006 - Department of Mines
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National Mineral Policy 2006 - Department of Mines

National Mineral Policy 2006 - Department of Mines National Mineral Policy 2006 - Department of Mines

planningcommission.gov.in
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12.07.2015 Views

10,000 sq. km in a state. This has attracted several world-renowned mining companies intoexploration in India. However, these companies are now facing the problem of scaling downtheir exploration work to the 25 sq. km limit if they want to apply for a PL after completionof the RP exercise. It is argued that reducing their exploration activities suddenly to 25 sq. kmfrom a size as big as 10,000 sq. km is detrimental to scientific exploration. It is also arguedthat the steep initial drawdown prescribed in respect of a RP could lead to some areas actuallyremaining un-surveyed or inadequately explored, creating a false perception that suchrelinquished areas have no mineral potential and are not worth prospecting further. Therefore,RP holders have been asking for an increase in the area limits of their PLs well above thecurrent limit of 25 sq. km.1.53 It has been proposed in some of the representations that the area limit of a PL couldbe increased either in terms of keeping it as a percentage of the RP or a fixed limit of 500–1000 sq. km. The rationale behind the demand is that an RP of 10,000 sq. km often yieldsdata warranting detailed work on a much larger scale than the meagre 25 sq. km nowpermitted. The data is locked in for a period of three years during which time no prospectingcan be done. Even subsequently, it is not fair that the generator of the data be treated nodifferently than other users who have accessed the data from the public domain. It has alsobeen suggested that the case of a PL applicant who held an RP prior to applying for the PLmay be distinguished from that of one who directly applies for a PL on the basis of existingexploration data. The Committee headed by the Additional Secretary, Ministry of Minesdeliberated on this issue at length and suggested that the ceiling on the PL area be increasedfrom 25 sq. km to 500 sq. km for RP holders who have undertaken at least an aerial survey oftheir entire RP area and filed their data with GSI or IBM. We consider the suggestion of theCommittee headed by the Additional Secretary, Ministry of Mines to be appropriate. Thelimit for direct PL applicants is proposed to be increased from 25 to 50 sq. km in a state.However, for RP holders who obtain PLs for more than 100 sq. km (i.e. up to 500 sq. km),the relinquishment process should apply so as to scale down the PL area to 100 sq. km at theend of the first three years of the PL period. Strong obligations for working on the PLs shouldbe imposed on PL holders, including expenditure commitments on an escalating scale, whichshould be incorporated as an important condition into the licence.1.54 In the case of LAPLs, where, unlike in the case of RPs, the expenditure commitmentsas well as adherence to work done will be closely monitored, the area of 5000 sq. km may be36

etained with relinquishments down to 500 sq. km (or less) at the end of the first three yearsand to 100 sq. km (or less) at the end of the next three years. This would be compatible withthe RP/PL duration format. Additional areas for LAPL (above 5000 sq. km) could beconsidered in very exceptional situations to be spelt out clearly in the MCR, such as forsound technical reasons or where multiple minerals are being prospected and where nopending application exists. Of course, in cases where LAPLs are granted in RP areas to RPholders, the relinquishment down to 500 sq. km will be after a three-year period that willinclude the period expended in the RP.1.55 In the presentations before the Committee, it has also been submitted that themaximum area for MLs in a state may be increased from the present 10 sq. km to 20–50 sq.km, as the development of world-class ore bodies require larger areas, especially if themineral type is such that it covers large surface areas. In international mining laws, there isgenerally no upper size limit based on cumulative lease area. The size of the ML should besuch as to allow for an area suitable for scientifically mining the entire deposit/ ore body.Therefore, ideally the maximum area held under a PL for detailed exploration should be themaximum area from which the lessee is entitled to extract. PL holders should have the rightto mine complete ore bodies explored by them in detail and found to be worthy of mining.Since the limit of the PL is being proposed at 100 sq. km at the end of the third year (out ofthe five-year period), the maximum area for a ML for a PL holder may also be kept at 100 sq.km in a state. For direct PL applicants, the limit for ML would be 50 sq. km, coterminouswith their PL area.1.56 The MMDR Act grants flexibility to government to consider cases where larger areasare sought under PL and ML over and above the prescribed limits. The government maygrant the same at its discretion. This creates uncertainty in the minds of the investors, as theyare unable to plan for prospecting and/or mining in advance during the reconnaissance/LAPLstage itself. It is necessary to remove this uncertainty in the interest of promoting prospectingand mining over as large an area as possible.1.57 In the light of the above discussions, the Committee recommends the followingchanges:(i)The limit for a direct PL applicant should be increased from 25 to 50 sq. km.37

10,000 sq. km in a state. This has attracted several world-renowned mining companies intoexploration in India. However, these companies are now facing the problem <strong>of</strong> scaling downtheir exploration work to the 25 sq. km limit if they want to apply for a PL after completion<strong>of</strong> the RP exercise. It is argued that reducing their exploration activities suddenly to 25 sq. kmfrom a size as big as 10,000 sq. km is detrimental to scientific exploration. It is also arguedthat the steep initial drawdown prescribed in respect <strong>of</strong> a RP could lead to some areas actuallyremaining un-surveyed or inadequately explored, creating a false perception that suchrelinquished areas have no mineral potential and are not worth prospecting further. Therefore,RP holders have been asking for an increase in the area limits <strong>of</strong> their PLs well above thecurrent limit <strong>of</strong> 25 sq. km.1.53 It has been proposed in some <strong>of</strong> the representations that the area limit <strong>of</strong> a PL couldbe increased either in terms <strong>of</strong> keeping it as a percentage <strong>of</strong> the RP or a fixed limit <strong>of</strong> 500–1000 sq. km. The rationale behind the demand is that an RP <strong>of</strong> 10,000 sq. km <strong>of</strong>ten yieldsdata warranting detailed work on a much larger scale than the meagre 25 sq. km nowpermitted. The data is locked in for a period <strong>of</strong> three years during which time no prospectingcan be done. Even subsequently, it is not fair that the generator <strong>of</strong> the data be treated nodifferently than other users who have accessed the data from the public domain. It has alsobeen suggested that the case <strong>of</strong> a PL applicant who held an RP prior to applying for the PLmay be distinguished from that <strong>of</strong> one who directly applies for a PL on the basis <strong>of</strong> existingexploration data. The Committee headed by the Additional Secretary, Ministry <strong>of</strong> <strong>Mines</strong>deliberated on this issue at length and suggested that the ceiling on the PL area be increasedfrom 25 sq. km to 500 sq. km for RP holders who have undertaken at least an aerial survey <strong>of</strong>their entire RP area and filed their data with GSI or IBM. We consider the suggestion <strong>of</strong> theCommittee headed by the Additional Secretary, Ministry <strong>of</strong> <strong>Mines</strong> to be appropriate. Thelimit for direct PL applicants is proposed to be increased from 25 to 50 sq. km in a state.However, for RP holders who obtain PLs for more than 100 sq. km (i.e. up to 500 sq. km),the relinquishment process should apply so as to scale down the PL area to 100 sq. km at theend <strong>of</strong> the first three years <strong>of</strong> the PL period. Strong obligations for working on the PLs shouldbe imposed on PL holders, including expenditure commitments on an escalating scale, whichshould be incorporated as an important condition into the licence.1.54 In the case <strong>of</strong> LAPLs, where, unlike in the case <strong>of</strong> RPs, the expenditure commitmentsas well as adherence to work done will be closely monitored, the area <strong>of</strong> 5000 sq. km may be36

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