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Mineral laws (Amendment) bill

  • Category
    Governance
  • Published
    25th Mar, 2020

The Indian parliament has passed Mineral laws (Amendment) Bill, 2020 that will open the coal sector fully for commercial mining for all domestic and international mining companies.

Context

The Indian parliament has passed Mineral laws (Amendment) Bill, 2020 that will open the coal sector fully for commercial mining for all domestic and international mining companies.

About

  • In India, mining is a major economic activity and accounts for more than 2% of the country's gross value added (GVA).
  • The sector provides the basic raw materials required by several manufacturing and infrastructure industries in the country.
  • India is home to 1,531 operating mines and produces 95 minerals, including:
    • 4 fuel-related minerals
    • 10 metallic minerals
    • 23 non-metallic minerals
    • 3 atomic minerals
    • 55 minor minerals (including building and other minerals)
  • Globally, India is ranked as one of the leading producers of valuable minerals such as chromite, iron ore, coal and bauxite.
  • The mining sector in India is highly regulated and the legal framework has undergone significant changes in the past three years, the result of which is a more transparent and efficient regime.

Key-highlights of the Bill:

  • The Bill amends the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) and the Coal Mines (Special Provisions) Act, 2015 (CMSP Act). 
  • The latest ‘Mineral laws (Amendment) Bill’ replaces the ‘Mineral Laws (Amendment) Ordinance, 2020’.
  • The amended provisions clearly provide that companies which do not possess any prior coal mining experience in India and/or have mining experience in other minerals or in other countries can participate in the auction of coal/lignite blocks.
  • This will not only increase participation in coal/lignite block auctions, but also facilitate the implementation of FDI policy in the coal sector,” the statement said.
  • Now, the companies that are not ‘engaged in specified end-use’ can also participate in the auctions of Schedule II and III coal mines.
  • The removal of the end-use restriction would allow wider participation in coal mine auctions for a variety of purposes such as own consumption, sale or for any other purpose, as may be specified by the Centre
  • The Bill also removed the current end-use restrictions, thereby allowing for wider participation and competition in auction.
  • The bill also allows prospecting licence-cum-mining lease (PL-cum-ML) for coal/lignite which increases availability of coal and lignite blocks, and coal blocks of varying grades in a wide geographical distribution will be available for allocation.

Significance of the Bill:

  • The legislation is likely to bring a ‘sea change’ in the coal mining sector and noted that the focus should be on exploring reserves without harming the environment.
  • The bill will open up the coal sector for commercial mining and allow domestic as well as global companies to invest.
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