Mining, Minerals and related Laws

Share on:

Mining may be a major economic activity in India and accounted for twenty-four of the country's gross value added (GVA) for the third quarter of 2019 to 2020. the world provides the fundamental raw materials required by several manufacturing and infrastructure industries within the country.

India produces 95 minerals, including:

  • Four fuel-related minerals.
  • Ten metallic minerals.
  • 23 non-metallic minerals.
  • Three atomic minerals.
  • 55 minor minerals (including building and other minerals).

Globally, India is ranked as the leading producers of valuable minerals like chromite, iron ore, coal, and bauxite.

The mining sector in India is extremely regulated and therefore the legal framework has undergone significant changes within the past five years, the results of which could be a more transparent and efficient regime.

Some of the recent developments in the mining sector include:


The Mineral Laws (Amendment) Act 2020

  • This amends the Mines and Minerals (Development and Regulation) Act 1957 (MMDR Act) and also the Coal Mines (Special Provisions) Act 2015 (CMSPA). The amendments to the MMDR Act, among other things:
  • Enables state governments to require advance actions for the auction of a mining lease before its expiry; 
  • Provides for approvals, licenses and clearances of the previous lessee to be automatically transferred to the new lessee for a period of two years from the date of grant of the new lease; and allows holders of a non-exclusive reconnaissance permit to use for other licenses.
  • The amendments to the CMSPA are geared toward boosting coal production and reducing dependencies on imports. Companies with no coal mining or other mining experience can participate in auctions of coal blocks. 
  • Further, the amendment removes end-use restrictions on companies producing coal under the CMSPA. The amended provisions, therefore, afford wider participation within the auction of coal mines for a range of purposes (such as own consumption or for the other purpose specified by the central government).

The Occupational Safety, Health and dealing Conditions Code 2020 (OSH Code). The central government has recently amalgamated the prevailing Indian labour laws regarding safety, health and dealing conditions of workers employed in various establishments, including mines, under the OSH Code. Among other things, the OSH Code sets the necessities for safety and dealing conditions of labour employed in mines. The OSH Code will get effect on a date to be notified by the central government. Once notified, it'll replace the Mines Act 1952 (Mines Act) and also the Mines Rules 1955 (Mines Rules).

Also Read: Environmental Laws in India

National Mineral Policy 2019

This policy replaces the National Mineral Policy 2008. The policy was introduced with the aim to extend transparency and enforcement, and implement sustainable mining practices. Among other things, the policy includes incentives to draw in private investment and state-of-the-art technology through rights of first refusal at auction and opportunities for the private sector to require up exploration activities. The policy also emphasises strengthening the regulatory mechanism by incorporating e-governance systems to: prevent illegal mining and value leakages; facilitate end-to-end accounting of mineral ore within the supply chain; increase awareness and data campaigns to involve local populations, to supplement enforcement capabilities in preventing illegal mining.

To obtain licensing, one should provide an application accompanied with the prescribed fee to the government concerned. it's the discretion of the concerned authorities either to grant or refuse to grant license or lease on the premise of grounds mentioned within the Act. Licensing is additionally provided through the method of auction also.

In a case where two or more person has provided an application for a prospecting license, the applicant whose application has been received earlier shall have the proper for grant of licence. during this matter the court also investigates the applicants.

Special knowledge of or experience in mining operation, The financial resources it possesses, Nature and quality of staff being employed, And such other qualifications as is also prescribed by the government.

The Central Government also has power in respect of granting and limiting the grant of licenses because of the government.

Also Read: Cryptocurrency Laws in India

Limitation to licensing or mining lease

The state government cannot grant a license or mining lease to an individual who unless holds a certificate of approval in the form prescribed by authorities, produces an income-tax clearance certificate that satisfies other conditions as could also be prescribed by stated Also license or lease of mining isn't provided to someone who isn't Indian moreover as in respects to those minerals as prescribed within the First Schedule of Indian Constitution unless there's a previous approval of the Central Government.

Licensing is additionally limited on the idea of area being granted, which states that an individual cannot acquire in anybody state with respect to mineral or prescribed group of minerals:

One or more licenses covering a complete area of quite twenty-five square kilometers, one or more mining leases covering quite ten square kilometers.

Any mining lease or license in relevancy a region that isn't compact or contiguous. Unless the Central government finds it within the interest of the development of any mineral.

The government when providing licensing at the identical time it grants the amount that a prospecting license is valid which has been mentioned in Mines and Minerals (Regulation and Development) Act, which states that:

  • In the case of mica, a license is granted for a period of 1 year whereas within the case of the other minerals, license is granted for 2 years.
  • And after the expiry of the prescribed period, it is renewed again for the identical prescribed period.
  • If the prospecting licence or a mining lease holder fails without sufficient cause to produce information or documents or returns, shall be punishable with imprisonment which can be one year or fine which can be five thousand or both.

In Manohar Lal Sharma v. The Principal Secretary Ors., Writ Petition (Cri.) No. 120 of 2012, the Supreme Court held that there should be a cancellation of coal blocks allocated by the govt. in 1993 on the grounds that the procedure followed by the Central Government was in contravention of the MMDR Act, in terms of arbitrariness and non-transparency of procedures. 

Further, in another case resource Allocation, SR no 1 of 2012, the Supreme Court held that auctioning of natural resources wasn't a constitutional mandate and is just a way to profit businesses by serving as another kind of revenue.

Also Read: GST Laws In India


No doubt, the steps were taken towards improving the mining sector is appreciated. However, such an appreciation can not steer clear off speculation. The positive approach of this new Amendment is met with a long list of problems that require to be revisited and considered in immense detail so on achieve the goal of operational proficiency and successful usage of national assets.

01.Legal News
02.Legal Articles
03.Supreme Court Updates