Millennium Post

Mining bill is silent on profit sharing with affected people

Higher prison term and hefty penalty of Rs five lakh, 20 times higher than the existing fine for violating terms of mineral excavations are among the proposals contained in the draft Bill to amend the 57-year old Act governing India's mineral sector.

The proposed Mines and Minerals (Development and Regulation) (Amendment) Bill, 2014, which is silent on 26 per cent profit sharing clause by the mining companies with the project affected people in the lapsed MMDR Bill, also seeks to make illegal mining of notified minerals as a cognisable offence.

‘Provided that where the contravention of the provisions of sub-section (1) or sub-section (1A) of Section 4 is in relation to a notified mineral, punishment shall be imprisonment for a term which may extend to five years or with fine which may extend to five lakh rupees or with both,’ the Draft Bill says. The existing provisions provides for ‘imprisonment for a term which may extend to two years, or with fine which may extend to twenty-five thousand rupees, or with both’ for violations of norms, illegal mining, trespassing etc. ‘In the case of a continuing contravention, with additional fine which may extend to fifty thousand rupees for every day during which such contravention continues after conviction for the first such contravention.’

The Amendment Bill also seeks to make the offence of illegal mining in respect to notified minerals a cognisable offence. The purpose of the new Bill is to make the concession regime more investor-friendly by simplifying procedures as the new Bill that seeks to bring comprehensive amendments to the MMDR Act 1957, proposes to increase efficiency by allowing transfer of reconnaissance and prospecting licences and associated data without restrictions.

Aimed at improving transparency in allocation of mineral resources, government seeks to amend the existing Act to introduce competitive bidding through the auction route for iron ore and other minerals. ‘In order to both improve transparency in allocation as well as to ensure a fair share of the value of minerals for the government, the Bill prescribes competitive bidding by auction as the method to be followed for allocation of Mining Leases (MLs) in respect of notified minerals,’ said a draft copy of the Bill posted in Mines Ministry's website. It proposes that there is no need for reconnaissance permits or prospecting licences issued for such minerals. Seeking comments from stakeholders, the ministry in the proposed Bill has said the route has been proposed in line with recommendations of the Hoda Committee on National Mineral Policy.

The bill, if passed in Parliament, would amend the 1957 Act under the same name. The earlier Bill had lapsed. As far as non-notified minerals are concerned, the Bill seeks to grant a combined PL-cum-ML for these minerals through a competitive bidding process.

‘The scheme envisages that the successful bidder will conduct the exploration and prospecting work at his own risk and cost. In case there is any find, he will have to abide by the bid conditions which could be in the form of a production share, or a payment linked to the royalty payable etc,’ it said.
Though mining is a state subject, the new Bill seeks to empower Centre to prescribe different Terms and Conditions for auctions of different types of minerals and their application to different states.

The new Bill, it said, will also have focus on attracting private investment and latest technology and eliminating delay in administration, so as to enable expeditious and optimum development of mineral resources of the country. To empower states, the proposed Bill has also a provision to enable
state governments to set up special courts for trial of offences under the Act, if felt necessary.
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