National Mineral Policy 2006 - Department of Mines

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ContentsAcronyms....................................................................................................................................vConversion Table....................................................................................................................viiiPART - AIntroduction..............................................................................................................................2Chapter 1: National Mineral Policy and MMDR Act ..........................................................5Evolution of Mining Policy and Law.........................................................................................5Liberalisation of Foreign Direct Investment ..............................................................................8Issues related to Policy and Statutes ........................................................................................13Chapter 2: Procedures for Granting Mineral Concessions ...............................................51Procedural Complexities..........................................................................................................51Application Processing: Time and Motion Analysis ...............................................................52Other Clearances......................................................................................................................54Single Window: Co-ordination-cum-Empowered Committee Approach................................55Adherence to Time Schedules for Consideration of Applications for RP, LAPL/PL, and ML..................................................................................................................................................58Simplification of Procedure for Ascertaining Availability of Areas .......................................61Procedure for Dispute Resolution............................................................................................64Chapter 3: Forest Conservation and Environment Protection.........................................66Need for Sustainable Development..........................................................................................66Control, Use, and Management of Land ..................................................................................67Mining Activities and the Environment...................................................................................68Local Communities and Mining Activities..............................................................................69ICMM and SDF .......................................................................................................................70Relief and Rehabilitation .........................................................................................................73Social Responsibility and the Mining Sector...........................................................................76Forest and Environment Clearances ........................................................................................77Chapter 4: Infrastructure Needs and Financing.................................................................94Linking Infrastructure for Mining Activities ...........................................................................94Infrastructure Needs of the SME Sector..................................................................................97Infrastructure Needs in Iron Ore Belts...................................................................................101Infrastructure Needs of Dimension Stone Industry...............................................................102Transport Infrastructure: Roads, Railways, and Ports ...........................................................102Infrastructure Financing.........................................................................................................107Institutional Framework.........................................................................................................109Chapter 5: Value Addition..................................................................................................111Pros and Cons of Value Addition as a Condition for Mining Concession............................112Striking a Balance ..................................................................................................................117ii
Chapter 6: Augmenting State Revenues............................................................................120Revenue to States from Mining Sector ..................................................................................120Methodology for Calculation of Royalty...............................................................................122Present Royalty Regime in India ...........................................................................................122Royalty Rates in Other Countries and Implications for India................................................125Implications of Illegal Mining ...............................................................................................130Fiscal Regime and its Stability ..............................................................................................132Other Sources of Revenue......................................................................................................133Chapter 7: Other Issues.......................................................................................................135Raising Funds for Prospecting...............................................................................................135Allocation of Captive Mines to Steel Makers........................................................................143Restrictions on the Export of Iron Ore...................................................................................160Policy on Beach Sand Minerals .............................................................................................168Chapter 8: Conclusions and Recommendations ...............................................................183National Mineral Policy and MMDR Act..............................................................................183Procedures for Granting Mineral Concessions ......................................................................197Forest Conservation and Environment Protection.................................................................202Infrastructure Needs and Financing.......................................................................................209Value Addition.......................................................................................................................211Augmenting State Revenues ..................................................................................................213Other Issues............................................................................................................................216PART - BAppendicesAppendix A: ORDER - Constitution of the High Level Committee .....................................222Appendix B: Minutes of the Twelfth Meeting of the High Level Committee.......................224Appendix C: Submissions for and Presentations made before the High Level Committee ..233Appendix D: Summary of the Recommendations of the Committee headed by AdditionalSecretary, Ministry of Mines to Review Policy and Procedural Aspects ofReconnaissance Permits.................................................................................................235Appendix E: Recommendations of the Expert Group on National Guidelines for MiningLeases—Iron, Manganese, and Chrome Ores, Headed by Shri R. K. Dang .................238Appendix F: Cross-country Comparison of Mining Laws ....................................................244Appendix G: Cross-country Comparison of Mining Lease Aspects .....................................248Appendix H: Cross-country Comparison of Environment Laws and Related Aspects .........252Appendix I: Cross-country Comparison of Various Aspects of Mining Reforms.................253AnnexuresAnnexure 1: Geological Survey of India: Mineral Exploration Status and Future Scenario 255Annexure 2: Federation of Indian Mineral Industries—Querist: OPINION .........................257Annexure 3: Recommendations of the High Level Committee – Disagreements of the States’Representatives ..............................................................................................................261Annexure 4: The 2002 Sustainability Reporting Guidelines of Global Reporting Initiative 268iii
Page 2 and 3: National Mineral PolicyReport of th
Page 6 and 7: Annexure 5: Using the GRI Guideline
Page 8 and 9: GDP gross domestic productGIS Geogr
Page 10 and 11: UNFCUSVATWCUUnited Nations Framewor
Page 12 and 13: Introduction1. The Government of In
Page 14 and 15: issues relate to fund raising by pr
Page 16 and 17: termination of MLs, lowering of cei
Page 18 and 19: • In the case of large mining ope
Page 20 and 21: investment. The work done by GSI co
Page 22 and 23: mainly for minerals of base metals
Page 24 and 25: 1.21 This situation has changed dra
Page 26 and 27: absent. A study by the United Natio
Page 28 and 29: example, a mining major may outsour
Page 30 and 31: would otherwise remain unexploited
Page 32 and 33: the policy environment must continu
Page 34 and 35: ‘A thrust is to be given to explo
Page 36 and 37: In reviewing the MMDR Act, it is ne
Page 38 and 39: permissible activities in order to
Page 40 and 41: (i)(ii)(iii)(iv)The current two-tie
Page 42 and 43: per plan should be significantly hi
Page 44 and 45: Duration of Concessions1.48 In the
Page 46 and 47: 10,000 sq. km in a state. This has
Page 48 and 49: (ii)(iii)(iv)The maximum total area
Page 50 and 51: e obviated if the lease deed is exh
Page 52 and 53: elinquishment of areas by the lesse
Page 54 and 55:
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
Page 168 and 169:
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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7.58 Export of iron ore fines on a
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POLICY ON BEACH SAND MINERALS7.64 B
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not contain more than 0.1 per cent
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7.73 On 18 January 2006, the DAE no
Page 184 and 185:
with the Centre is mainly to ensure
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India enterprise) reported that the
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chloride process pigment technology
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are disposed of in the mined-out ar
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directed to ensure that the AERB/AM
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would have to be carefully drafted
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‘In coordination with the Geologi
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Exploration Licences• The current
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• The fees should be significantl
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surveys have been undertaken, the P
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automatic until the exhaustion of t
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y stating in the MMDR Act that a pr
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departmental representative for sec
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therefore (under Rule 63A), pass su
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• Section 12(1) of the MMDR Act s
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o The lessee should not be asked to
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again and the State Mines Departmen
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• As in the past, no environmenta
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oad and rail, and lack of long-term
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government to the applicants who ar
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next three-year period as well. In
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• Rates of dead rent should be ra
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measure to provide a level playing
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• In respect of three titanium be
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No-I&M-25(3)/2005Government of Indi
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No-I&M-25(3)/2005Planning Commissio
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‘Efforts would also be made to gr
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ecommending amendments to the Act a
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etained as a Prescribed Substance u
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OthersShri Arvind VarmaEx-Secretary
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16. Reserve Bank of India17. M/s Ji
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the RP holders in areas beyond 25 s
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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
Page 268 and 269:
operations are undertaken over a fa
Page 270 and 271:
B. After Rule 54 of the Mineral Con
Page 272 and 273:
the Central Government to entertain
Page 274 and 275:
applications, could exercise the ju
Page 276 and 277:
We most humbly request that the abo
Page 278 and 279:
Annexure 4The 2002Sustainability Re
Page 280 and 281:
While unique in its coverage and pr
Page 282 and 283:
• facilitate comparability• add
Page 284 and 285:
AssuranceJust as investors look to
Page 286 and 287:
The Guidelines are structured in fi
Page 288 and 289:
There are many aspects relevant for
Page 290 and 291:
- Issues in which community partici
Page 292 and 293:
Annexure 7Royalty Accruals on Miner
Page 294 and 295:
Sl.No.MineralAnnexure 8 (cont.)2003
Page 296 and 297:
Annexure 91 THE SECOND SCHEDULE 1(S
Page 298 and 299:
(v) Group V Coals:(a) Non-Coking Co
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23. Iron Ore:(i) Lumps:(a) with 65
Page 302 and 303:
45. Tin Five per cent of London Met
Page 304 and 305:
International Comparison of Royalty
Page 306 and 307:
Production, Consumption, Exports, a
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National Mineral Policy 2006 - Department of Mines

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