The Mines and Minerals (Development & Regulation) Amendment Act, 2015 (Amendment Act) has been notified on 27 March 2015. The Amendment Act does not feature any changes from The Mines and Minerals (Development & Regulation) Amendment Ordinance, 2015 (Ordinance) which was promulgated by the President of India on 12 January 2015. Please click here to view our previous coverage of the Ordinance.  The Amendment Act is deemed to have come into effect from the date of the Ordinance i.e. 12 January 2015.

The key amendments introduced by the Amendment Act to the Mines and Minerals (Development and Regulation) Act, 1957 (Act) include the following:

  1. Auction Process for Grant of Mineral Concessions

The grant of mining lease for bauxite, iron ore, limestone and manganese ore (Notified Minerals) will be through a competitive bidding process including by way of e-auction.

  1. Prospecting License-cum-Mining Lease and its Auction

A new category of mine concessions, namely, ‘prospecting license-cum-mining lease’ (PML) is introduced which is a two-stage concession for undertaking prospecting operations to be followed by mining operations. The availability of PML does not however extend to: (a) hydrocarbons/energy minerals and atomic minerals; (b) land in respect of which minerals do not vest with the Government; (c) minerals under applications made prior to the Amendment Act which in terms of the Amendment Act remain eligible; (d) minerals in reserved areas under Section 17A of the Act. The grant of PMLs for Notified Minerals and minerals which may not be notified will be made by way of a competitive bidding process. However, for grant of PML for Notified Minerals, prior Central Government approval will be required.

  1. Transfer of Mineral Concession

Mining leases and PMLs (for minerals other than energy or atomic minerals) are transferable with the prior approval of the State Government and if no response is received on the transfer application within 90 days then the approval will be deemed to have been given.

  1. Right of First Refusal

A lessee of a captive mine (other than energy and atomic minerals) will have a right of first refusal at the time of auction for such lease after the expiry of the lease period.

  1. Lapse of Applications Made Prior to the Amendment Act

All applications received under the Act prior to 12 January 2015 will become ineligible except for: (a) applications received in respect of coal and lignite; (b) applications for grant of prospecting license or mining lease (as applicable) with respect to minerals not being energy minerals or atomic minerals, where prior to 12 January 2015, reconnaissance permits or prospecting licenses (as applicable) had been granted in respect of any land for any mineral, subject to compliance with certain conditions; and (c) applications in respect of minerals, where the Central Government had communicated prior approval for grant of a mining lease or if a letter of intent (by whatever name called) had been issued by the State Government for grant of a mining lease prior to 12 January 2015 and wherein the mining lease will be granted within a period of 2 years from 12 January 2015 subject to the conditions as specified in the prior approval or the letter of intent being met.

This provision of the Amendment Act creates an anomaly by rendering as ineligible all applications (except the exempted categories specified above) that were made prior to 12 January 2015, even if such applications only remained pending on account of the Central Government not responding to the State Government recommendations in respect of the grant of mining lease (for no discernible reasons). Similarly, the Amendment Act also makes ineligible cases where the Central Government had sought additional information from the State Government and upon being furnished the same neither granted its consent nor rejected the recommendation of the State Governments.