News Update

Mineral laws Amendment Bill, 2020 was passed by Parliament on 12th March 2020

March 17, 2020

The present article dwells upon the Mineral Laws Amendment Bill, 2020 passed by the Parliament on 12^th March 2020. According to India today, the Bill was passed amid noisy scenes on Friday when the House reassembled at 12 noon following an adjournment.[1]

Background:

Parliament passed The Mineral Laws (Amendment) Bill, 2020 for amendments in Mines & Mineral (Development and Regulation) Act 1957 and The Coal Mines (Special Provisions) Act, 2015, as stated by long title/ preamble. Rajya Sabha passed the bill on 12^th march 2020 and Lok sabha passed bill on 6^th March 2020.[2] Union Coal & Mines Minister Sh. Pralhad Joshi said that this Bill will transform the mining sector in the country boosting coal production and reducing dependence on imports.

Brief facts:

Chapter 2 of the bill made a provision for “AMENDMENTS TO THE MINES AND MINERALS (DEVELOPMENT AND REGULATION) ACT, 1957.”[3] Section 2 of the bill made provision for insertion of

“4B. Notwithstanding anything contained in section 4A, the Central Government may, in the interest of maintaining sustained production of minerals in the country, prescribe such conditions as may be necessary for commencement and continuation of production by the holders of mining leases who have acquired rights, approvals, clearances and the like under section 8B.” after section 4A, in the principal Act.

Section 3 of the bill made provision for insertion of section 5 of the Principal Act, which is as follows:

“Provided further that the previous approval of the Central Government shall not be required for grant of reconnaissance permit, prospecting licence or mining lease in respect of the minerals specified in Part A of the First Schedule, where,— (i) an allocation order has been issued by the Central Government under section 11A; or (ii) a notification of reservation of area has been issued by the Central Government or the State Government under sub-section (1A) or sub-section (2) of section 17A; or (iii) a vesting order or an allotment order has been issued by the Central Government under the provisions of the Coal Mines (Special Provisions) Act, 2015.”.

The bill further made provision for insertion of proviso sub-section (4) in section 8A of the Principal Act, which is as follows:

“Provided that nothing contained in this section shall prevent the State Governments from taking an advance action for auction of the mining lease before the expiry of the lease period.”

Section 8B is inserted in the principal Act, which made Provisions for transfer of statutory clearances. It further provides for ‘Amendment of section 10C (2) by insertion of the proviso’, amendment of section 11A was made by this Act and amendment of section 13.

CHAPTER III of the bill made provision for AMENDMENTS TO THE COAL MINES (SPECIAL PROVISIONS) ACT, 2015. The amendment is made in section 4, section 5 and section 8 of the Coal Mines (Special Provisions) Act, 2015. Further amendment is made in section 9, section 18, section 20 and section 31 the Principal Act.

The bill also provides for Statement of Object And Reasons. It states that “The Mines and Minerals (Development and Regulation) Act, 1957” (the Mines and Minerals Act) was enacted with a view to provide for the development and regulation of mines and minerals under the control of the Union. It also states that objective of the enactment of “The Coal Mines (Special Provisions) Act, 2015” (the Coal Mines Act).

The bill provide for Memorandum Regarding Delegated Legislation. Clause 8 of the Mineral Laws (Amendment) Bill, 2020 seeks to amend sub-section (2) of section 13 of the Mines and Minerals (Development and Regulation) Act, 1957 that empowers the Central Government to make rules by notification in the Official Gazette.

The bill further provides for annexure, which include Extracts from The Mines And Minerals (Development and Regulation) Act, 1957 And Extracts From The Coal Mines (Special Provisions) Act, 2015.

The Bill replaces the ordinance for amendment of the MMDR Act 1957 and CMSP Act which was promulgated on 10th January 2020. The Bill is expected to open a new era in Indian coal & mining sector especially to promote Ease of Doing Business.[4]

Key features of the bill:

Removal of restriction on end-use of coal[5]

Companies acquiring Schedule II and Schedule III coal mines through auctions can use the coal produced only for specified end-uses such as power generation and steel production. The Bill removes this restriction on the use of coal mined by such companies.[6]

Eligibility for auction of coal and lignite blocks:

The Bill clarifies that the companies need not possess any prior coal mining experience in India in order to participate in the auction of coal and lignite blocks[7].

The Bill adds a new type of license, called prospecting license-cum-mining lease. Separate licensesare provided for prospecting and mining of coal and lignite, called prospecting license, and mining lease, respectively. Prospecting includes exploring, locating, or finding mineral deposit.
The Bill provides that state governmentscan take advance action for auction of a mining lease before its expiry.
Transfer of statutory clearances to new bidders.
The Bill provides that prior approval of the central government will not be requiredby the state government in granting licenses for coal and lignite, in certain cases.