09-December-2024-Editorial

MINING REGULATIONS IN INDIA

The Indian mining sector is vital for economic development, but it faces significant challenges related to environmental sustainability, operational inefficiencies, and legal regulations.

Recently, the central government permitted state governments to include non-mineralized areas within existing mining leases for waste management, addressing industry needs while adhering to environmental safeguards.

Key Updates on Mining Regulations

Inclusion of Non-Mineralized Areas in Mining Leases

Recent Policy Change:

• The Centre now allows states to include non-mineralized zones within existing mining leases for dumping waste and overburden.
• This step aims to streamline operations and address operational challenges.

Legal Provisions Supporting the Decision:

• The Mines and Minerals (Development and Regulation) Act, 1957 permits non-mineralized areas for ancillary activities like waste disposal.
• Supported by the Mines Act, 1952 and Mineral Concession Rules, 2016, which allow ancillary zones to be part of a lease.

Supreme Court Rulings on Mining Regulations

Central Authority Over Mining:

• In the India Cement Ltd. v. State of Tamil Nadu (1989) case, the Supreme Court ruled that mining regulation falls under the Centre’s authority through the Mines and Minerals (Development and Regulation) Act, 1957.

States’ Power to Tax Mineral Rights:

• In State of Orissa v. M.A. Tulloch & Co., it was decided that states could collect royalties but not impose additional taxes.
• A 2004 review in State of West Bengal v. Kesoram Industries Ltd. revisited this classification.
• In July 2024, the Court overturned the 1989 ruling, empowering states to tax mineral rights under Entry 50 of the State List. However, it urged Parliament to ensure federal consistency in mineral pricing and development.

Dumping Outside Lease Areas:

• In Goa Foundation v. Union of India (2014), the Court prohibited dumping mining waste outside valid lease boundaries to protect the environment and ensure compliance with mining laws.

Implications of Including Non-Mineralized Areas in Leases

Operational Benefits:

• Streamlines waste and overburden management within mining leases, ensuring safe and efficient operations.
• Overburden (soil, rocks, and debris) can be disposed of in contiguous non-mineralized areas, reducing operational hurdles.

Compliance with Legal Rulings:

• Aligns with the 2014 Supreme Court ruling, which disallowed waste dumping outside lease areas.
• Promotes efficient land utilization without requiring separate auctions for waste disposal zones.

Encouraging Industry Growth:

• Resolves challenges faced by mining companies, fostering sustainable mineral extraction and industry expansion.
• Allows states to allocate contiguous or non-contiguous non-mineralized areas for waste disposal, subject to proper verification.

Safeguards Against Misuse:

• States must verify non-mineralized areas and consult the Indian Bureau of Mines (IBM) for approvals.
• Ensures accountability by requiring IBM notification for supplementary leases.

Mines and Minerals (Development and Regulation) Act, 1957

Legislative Framework:

• The Act regulates India’s mining sector, focusing on mineral development, conservation, and transparent practices.

Key Amendments:

2015 Amendment:

• Introduced the auction system for granting mining concessions.
• Established the District Mineral Foundation (DMF) to support mining-affected communities.
• Set up the National Mineral Exploration Trust (NMET) to enhance mineral exploration.
• Imposed stricter penalties for illegal mining activities.

2021 Amendment:

• Allowed captive mines to sell up to 50% of annual production in the open market after meeting end-use plant requirements.
• Mandated auction-based concessions for all private-sector mining projects.

2023 Amendment:

• Removed six minerals from the list of atomic minerals, enabling private and state agencies to explore them.
• Encouraged foreign direct investment (FDI) through exploration licenses.
• Focused on critical minerals like lithium, cobalt, and rare earth elements to reduce import dependence and support India’s green energy goals.

Impact of Recent Changes on Mining Practices

• Streamlined Waste Management: Mining companies can now use non-mineralized areas within leases for efficient disposal of overburden, aligning with environmental norms.
• Boost to Exploration: The inclusion of exploration licenses under the 2023 amendment encourages private investment and advanced mining technologies.
• Support for Energy Transition: By prioritizing critical minerals, India is better positioned to achieve its net-zero emissions goal by 2070 and reduce reliance on imports.
• Balancing State and Central Roles: Recent rulings and amendments have clarified the division of powers, with states gaining authority to tax mineral rights while the Centre ensures uniformity and mineral development.

Conclusion

The recent inclusion of non-mineralized areas in mining leases is a significant step toward addressing operational challenges and fostering sustainable growth in the mining sector. With robust legal frameworks, such as the Mines and Minerals (Development and Regulation) Act, 1957, and Supreme Court rulings emphasizing environmental and operational compliance, India is advancing toward a more efficient and regulated mining industry.