National Mineral Policy 2006 - Department of Mines

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(v)(vi)(vii)Rules should be prescribed in the MCR for interpreting precisely the criteriaprovided under Section 11(3) of the MMDR Act, laying down the benchmarks tothe extent possible so that there is clarity and objectivity in the application of thesecriteria.Until IBM is ready with its information website the concept of notifications willneed to continue. Section 11(4), relating to the treatment to be given to concessionapplications in notified areas, will need to be modified to take non-exclusive RPsout of its purview and bring LAPLs within its purview. Notifications will berestricted to LAPLs and MLs. The former will be for greenfield areas or areasmentioned in paragraph 1.44 (vi) above. ML notifications will be restricted only toareas fully prospected by GSI or government agencies and shall be for grantingMLs on tender/auction basis. PL applications are expected to emerge either fromfreely available RPs or from the reconnaissance data put out by GSI andgovernment agencies.Section 11(5), which grants overriding discretion to the state government tobypass the priority principle in any situation, should be deleted.Transferability of Prospecting Licences1.68 It has been argued in the context of the Canadian model (see paragraphs 1.30 and1.31) that for exploration firms the ability to transfer a PL or a ML based on prospecting doneby them is vital. Stand alone exploration companies who specialise in exploration do notmine. Their goal is to discover a deposit and then to transfer their interest in that deposit for aroyalty, cash payment, etc. to a company that specialises in mining. Large mining companiesare also interested in transfer rights because if they discover a rich but small deposit that istoo small for their portfolio, they would like to be able to sell their interest to a smaller firm.In most countries where transfers of prospecting rights/MLs are permitted by law, the mostcommon restriction is that the entity to which the right is being transferred must qualify tohold the right by meeting defined competency requirements. To ensure efficient and timelyhandling of a request for the transfer of an exploration right it is necessary that the regulationsand rules be clearly stipulated, detailing the procedures to be followed by both the applicantand the government agency involved with minimal discretion to the regulatory authority.1.69 In India, a PL is transferable but instead of a provision in the MMDR Act the right ismentioned in the licence document (MCR Form F, Part IV, Rights of Licensee/Licensees).46
The actual process of transfer is not transparent. Rule 14(vii) of MCR states that transfersshall be subject to the sanction of the state government. MCR Form P is the format in which atransfer deed is to be executed. MCR Form F (Model Form of PL) contains a provision, PartIV(1) that summarises some of the requirements for a transfer. Rule 50 of MCDR requiresthat a notice of transfer be sent to the Controller General, the Controller of Mines, and theRegional Controller and Rule 52 of the MCDR requires a notice to be sent to the stategovernment in a prescribed form, namely MCDR Form L. Rule 51 of MCDR specifies thatcertain records must be transferred to the new licence holder and that a list of such recordsmust be sent to specified officials. Other Rules such as 46, 48, and 49 of MCR are alsoapplicable to transfers.1.70 Representations have been made before the Committee that most explorationcompanies find the provisions of India’s MMDR Act and its Rules pertaining to transfer ofPLs confusing. The requirements are scattered and the actual transfer procedure is unclear. Inmost new mining laws, the important right to transfer a PL is specified directly in the statutebut in the Indian system, the right arises from the licence. The need to obtain governmentapproval prior to transfer introduces an element of uncertainty, as the approval may be eitherwithheld or be slow to come. That the government has a duty to approve a transfer ifspecified requirements are met by the transferor and the transferee is not clearly stated. Ifinvestment in prospecting by prospecting firms is to be encouraged then discretion to deny atransfer should be limited to a finding that the transferee does not meet predeterminedqualifications. The uncertainty arises out of the fact that there is no obligation on theauthority to approve a transfer if all requirements have been met, the approving authority isnot required to inform an applicant for a transfer of the reasons for denying the transfer, andguidance is not provided regarding a time frame for approval/disapproval.1.71 The Committee, therefore, recommends that the right to transfer a PL should beexplicitly stated in the MMDR Act (and not left to the mining rules or the licenceinstrument). Greater transparency can be achieved by stating in the MMDR Act that aprospecting licensee has the right to transfer his licence to a qualified entity. A singleapproving authority should be named. The Rules should provide in a single section a detaileddescription of the procedure, requirements that must be met, the circumstances under whichan application can be denied, and a requirement for the approving authority to give reasonsfor denying an application. The Rules already provide that a transferee assume and be47
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National Mineral PolicyReport of th
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ContentsAcronyms...................
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
Page 58 and 59: esponsible for all rights, liabilit
Page 60 and 61: ut also the revenue generated from
Page 62 and 63: government at the Secretariat. A le
Page 64 and 65: Secretary. If the Directorate is in
Page 66 and 67: (i) All applications for mineral co
Page 68 and 69: application. A similar website shou
Page 70 and 71: concerned State Government (or othe
Page 72 and 73: Further, Rule 7D of the MCR specifi
Page 74 and 75: mission mode through, inter alia, t
Page 76 and 77: Chapter 3Forest Conservation and En
Page 78 and 79: conservation. There are trade-offs
Page 80 and 81: ICMM AND SDF3.8 The ICMM membership
Page 82 and 83: higher level. The basic approach is
Page 84 and 85: (i) To minimize displacement and to
Page 86 and 87: affected PAPs in the mining operati
Page 88 and 89: that a well-regulated and responsib
Page 90 and 91: (iii)Notwithstanding the above, sur
Page 92 and 93: egard, all ‘forest’ land must b
Page 94 and 95: Figure 3.1: Procedure for Processin
Page 96 and 97: should be authorised to grant or re
Page 98 and 99: formulation and appraisal of the EI
Page 100 and 101: 3.41 Recognising the need to make t
Page 102 and 103: Figure 3.3: Public Hearing/NOC from
Page 104 and 105: 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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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
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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
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(1) Provide proximate and strategic
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technology to enter the Indian stee
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Cross-country Comparison of Mining
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Appendix F (cont.)Country Mining La
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Cross-country Comparison of Mining
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Appendix G (cont.)Country Mining le
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CountryAppendix H (Cont.)Environmen
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AustraliaIndonesia 9 4 Not specifie
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Annexure 1 (cont.)Geologicalenviron
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operations are undertaken over a fa
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B. After Rule 54 of the Mineral Con
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the Central Government to entertain
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applications, could exercise the ju
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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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