National Mineral Policy 2006 - Department of Mines

criteria under Section 11(1)(a) to (d) and has adhered to the terms and conditions of thelicence then the conversion should be automatic. No additional conditions that have notalready been mentioned in the MCR should be levied.1.59 Additionally, there are serious reservations about certain provisions of the MMDRAct and Rules, viz. Sections 4(A)1 and 31 of the Act and Rules 26(1), 27(1)(b), 27(1)(m),27(3), and 34 of the MCR. These provisions are perceived as giving wide discretionarypowers to the state government and militating against the concept of security of tenure. Thereasons for the reservations are listed as under:(i) Section 4A(1) of the MMDR Act, which provides for premature termination ofa mineral concession, gives discretionary powers to the state government toterminate leases prematurely for such vague and wide ranging reasons as ‘in theinterest of Regulation of Mines and Mineral Development, conservation ofmineral resources and such other purposes, as the Central government maydeem fit’. Such powers for the government would be reasonable if they werelimited to the need for national security or public works.(ii) The powers with the Central government under Section 31 of the Act tocompletely bypass, ignore, or alter all or any of the provisions of the MCR forthe purpose of searching for and extracting minerals in the interest of mineraldevelopment militates against the concept of security of tenure and alsotransparency.(iii) The blanket powers with the state government to refuse grant and renewal ofMLs under Rule 26(1) of the MCR is in stark contrast with the priority clauseand negates the incentive to invest, which is provided by the latter. Simplyrecording the reasons in writing does not neutralise the arbitrary nature of thispower.(iv) Rule 27(1)(b) does not provide an automatic right to mine associated mineralsnot mentioned in the PL that may be found in the course of operating a PL.(v) Rule 27(1)(m) of the MCR gives the state government the right to pre-empt aminer’s minerals at all times subject to the fair market price being paid to thelessee. This right, which can be exercised at any time regardless of the miner’smarketing commitments, increases the uncertainty surrounding the project.Since the state is protected in different ways, the need for such pre-emption can39