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Mineral Laws (Amendment) Bill 2020


Mineral Laws (Amendment) Bill 2020

The Parliament has made amendments to the Mines and Minerals (Development and Regulation) Act, 1957 and The Coal Mines (Special Provisions) Act, 2015, and passed the Mineral Laws (Amendment) Bill 2020 on 12th March 2020.

Amendments to the Mineral Law

  1. The following companies can also participate during the bidding of coal/lignite blocks:
  • Coal Mining Companies that don’t have any experience in coal mining in India
  • Companies that have experience mining some other mineral in another country

This implies that mining companies other than coal are also allowed moreover, the mining experience does not necessarily have to be in India.

  1. End-Use Restriction has now been removed for companies to participate during Schedule-II and Schedule-III coal mine auctions.
  2. Prospecting License cum Mining Lease (PL-cum-ML) are now allowed for coal or lignite.
  3. The company that wins the bid is now allowed to use the coal that is mined in a plant owned by the company or by its subsidiaries or holding company.
  4. The amendment allows the coal mine to be allocated to the next successful bidder or allottee if the allocation to the winning bidder or allottee is terminated. The clearances already obtained (environment, forest and other approvals) automatically get transferred to the new owner for a period of 2 years from the date the new lease has been granted.
  5. All Auctions for mining leases are now allowed to start before the existing lease period expires.
  6. For the sake of management of mines that are under production but whose allotment order stands cancelled, the Government has introduced a provision to appoint a designated custodian. These mines are other than the Schedule-II mines.
  7. The new amendment has now permitted companies that already hold Non-exclusive Reconnaissance Permits (NREP) to apply for PL-cum-ML, which is expected to boost mineral exploration.
  8. Several provisions that were either repeated or redundant in The Mines and Minerals (Regulation and Development) MMDR Act, 1957 and Coal Mines (Special Provisions) Act, 2015 have now been removed.

Impact of Amendment on Coal Sector

  • Allowing mining companies in other minerals and also those with experience in coal mining in other countries will also pave the way for Foreign Direct Investment policy implemented in the Coal Sector.
  • Removing the End Use Restriction will imply a number of companies participating in the auction with a wide variety of purposes (consumption by self, selling coal or any other as specified by the Central Government). This again increases the usage of Coal mined in India.
  • The composite prospecting license (finding if coal is available and mining is viable in a location) and mining lease makes it much easier for the companies to do business in Coal Sector with minimal investment of time in bidding or paperwork involved to get the mining lease separately.
  • By automatically transferring the approvals and clearances already obtained to the new mining company for a period of two years, the Government removes the roadblocks in getting the fresh issue of environmental clearances.
  • Allowing the auction of mining lease to start before the older lease expires ensures continuity of mining and thus the production since the Government gets more time to decide the company that will be best suited before the lease expires.
  • The new bill will promote ease of doing business in the Indian coal & mining sector to a large extent because of removing provisions from the MMDR Act and CMSP Act that were repetitive and redundant.
  • There will be a big boost to coal production in India which will reduce the need to import coal from other countries.

The press notification can be accessed below: