National Mineral Policy 2006 - Department of Mines

(ii)(iii)(iv)The maximum total area under PL in a state be increased from the present 25 sq.km to 500 sq. km in the case of an RP holder. This would be subject to anescalating fee structure, minimum expenditure commitment, and relinquishmentof area so that the area held is brought down to 100 sq. km. at the end of threeyears. Where no aerial surveys have been undertaken, the PL area would be 50 sq.km instead of the current 25 sq. km.The LAPL may be granted for an area of 5000 sq. km for eight years, withrelinquishment down to 500 sq. km after the fifth year and 100 sq. km after sixyears. This will bring the LAPL area on par with the RP/PL area. The LAPL willbe subject to severe conditionality in terms of work to be done and expenditures tobe incurred on an escalating scale with appropriate penalties for failure. ForLAPLs in RP areas, the relinquishments will be as mentioned in paragraph 1.54above, i.e. down to 500 sq. km after three years of the total RP/LAPL duration of8 years and down to 100 sq. km after six years.For LAPL/PL holders the maximum area of MLs in a state may be increased fromthe present 10 sq. km up to the area held in the LAPL/PL at the time of applyingfor the ML. This means that a LAPL/PL holder would be entitled to MLs for theentire area of 100 sq. km in a state, which is the limit to which the LAPL/PL areais to be brought down at the end of the third year of the five-year PL or the sixthyear of an eight-year LAPL. For the PL holder who holds only 50 sq. km. in hisPL, the maximum area limit for a ML should remain at 50 sq. km only.Security of Tenure1.58 At present, Section 11(1) of the MMDR Act provides for ‘preferential’ rights to RPholders for getting PLs in the areas where they have done reconnaissance work and to PLholders for getting MLs where they have done detailed exploration. However, it is argued thata preferential right for conversion from one form of concession to the next does not guaranteean exclusive or absolute right to a concession holder to prospect or mine any mineral depositfound within the area covered by his RP or PL. This creates uncertainty about returns on theinvestment made during the exploration stage. For security of tenure to be assured, it isnecessary that investors are able to move from one form of concession to the next smoothlyin a seamless and speedy process. The right of a holder to move to the next form ofconcession should be a statutory right and not subject to discretion. If the holder meets the38