Mining Regulation And Government Policy
Government policy, mining regulation, and policy is one of the most influential
aspects determining development sustainability as well as the socio-economic
impact of the mining industry. The economy of every country relies heavily on
mining; therefore, governments have put policies in place to control the
extraction, processing, and distribution of mineral resources. The regulations
address guidelines for obtaining licenses, conducting environmental impact
assessments, safety measures, and sharing of income derived from mining
activities.
Good governance also involves fighting problems such as illegal artisanal mining, corruption, and abuse of power in the granting of mining licenses, which affects the right distribution of resources. In addition, there has been an increase in the adoption of local content policies in order to enhance sustainable employment and skills development in various communities. However, there is still difficulty balancing the needs of the country and those of foreign investors.
Externally, restrictive policies and regulations tend to limit foreign direct investment whereas overly relaxed ones permit abuse of resources and environmental damage. To solve this problem, many countries are changing their mining policies to integrate internationally accepted standards which focus on responsibility, long-term sustainability, and also active community participation.
Over the past few years, international projects like the Extractive Industries Transparency Initiative (EITI) have influenced national policies by fostering transparency, accountability, and stakeholder participation in the extractive industry. In the end, responsible mining governance should balance the need to attract investment, protect social and environmental interests, and ensure that resource abundance fosters sustained, equitable development.
Introduction
Indian mining is a sophisticated industry governed by a multilayered system of central and state government policies, legislation, and regulations. The Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), and its amendment constitute the fulcrum of mining laws. This law regulates the exploration and production of major minerals, whereas minor minerals are regulated by state governments according to their own rules, for example, the Kerala Minor Mineral Concession Rules, 2015.[1]
The MMDR Act has been amended numerous times, particularly in 2015 and 2020, to bring in transparency through competitive auctions for mineral concessions and to facilitate smooth changes in mining operations.
The regulatory system also consists of the Mineral Conservation and Development Rules, 1988, that uphold scientific mining and protection of the environment. The Mines Act, 1952, is also centered on labour and safety conditions in mines to ensure the well-being and security of workers.
Central regulatory agencies such as the Ministry of Mines, the Geological Survey of India, and the Indian Bureau of Mines are important to policy making, exploration, and regulation. State governments regulate minor minerals and enact laws to avoid illegal mining, like the Kerala Minerals (Prevention of Illegal Mining, Storage and Transportation) Rules, 2015.
Good regulatory systems are needed for the mining industry because it generates a high level of revenues and employment opportunities for states. The viability of the sector is also enhanced by schemes like the District Mineral Foundations (DMFs), [2]which invest mining revenues in local communities where mining is taking place.
Additionally, the government has implemented policies for promoting private sector involvement in exploration through nonexclusive reconnaissance licenses in order to spur mineral finds and economic growth. Generally speaking, the Indian regulatory framework is striving to provide balance between economic growth and environmental protection as well as social justice.
Ministry of Mines:
The Ministry of Mines is the public institution responsible for developing laws, policies and administrative procedures for the activities of a mine and its minerals. It controls the survey, exploration, and mining of all minerals excepting natural gas, petroleum, atomic minerals and coal. The Ministry works together with the state governments to implement these policies and ensure compliance with national standards. Additionally, it is responsible for integrating other departments and agencies toward effective overall coordination of mineral development and conservation.
Regular inspections under the Directorate General of Mines Safety (DGMS) are performed to check enforcement of these provisions. In such inspections, governments examine whether the mines are abiding by defined safety standards and whether proper welfare facilities, like safe drinking water and sanitary lavatories, are made available for the workers[7].
Besides overall health and safety protocols, the Mines Act places priority on medical surveillance of miners. This involves compulsory medical tests at employment and regular health checks every five years or as often as the person is exposed to certain dangers, like asbestos. The Act provides that when a miner gets any disease caused by mining operations— like silicosis or pneumoconiosis—the mine owner is to inform the Chief Inspector of Mines and other competent authorities.
These medical examinations are vital for early diagnosis and prevention of occupational illness due to harmful work conditions. Through ensuring proper medical attention and monitoring of miners, the Act seeks to safeguard their health and ensure a safer workplace in the mine industry. As a whole, the Mines Act sets out a full code for the protection of workers' health and welfare employed in one of the most difficult areas of work.
These contributions are usually a fraction of the royalty payments by mining companies. The amount of money raised by DMFs is used to carry out different developmental and welfare projects in miningaffected areas to counteract the negative effects of mining on the environment, health, and socio-economic conditions of local communities.
As regards rehabilitation and resettlement, DMFs adhere to the guidelines of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCTLARR) Act, 2013. The Act guarantees fair compensation and assistance to affected people during the process of land acquisition.
The RFCTLARR Act is also a requirement for the provision of rehabilitation and resettlement benefits to affected and displaced families that considers enhancing their social and economic welfare following land acquisition. DMFs complement this agenda by utilizing their funds to finance projects that aim to advance the living standards of mining-affected people and promote sustainable livelihoods. These encompass programs like access to clean water, health, education, and conservation of the environment, which are vital to the long-term health of these populations.
The Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) is one of the major government schemes that supplements activities conducted by DMFs. Initiated in 2015, PMKKKY seeks to use the funds from DMF for the execution of developmental projects and welfare schemes within mining-affected areas.
The program gives emphasis to high-priority sectors like drinking water supply, health, and education, as well as environmental conservation and sustainable livelihood generation [9] . Through the integration of these initiatives, DMFs are crucial in resolving past socio-economic imbalances and environmental issues related to mining operations, ensuring inclusive growth and sustainable development in affected areas.
Conclusion
Indian policy and regulation of mining are guided by a complex interaction of national and state-level laws, attempting to balance social and environmental responsibilities with economic development. The National Mineral Policy 2019 puts the emphasis on green mining priorities, stakeholder participation, and strong regulatory mechanisms to check illegal mining and ease of business.
The policy calls for one national agency to regulate mineral development and coordination, and also envisions gender sensitivity and value addition to the mining sector.
The law is commonly governed by the Mines and Minerals (Development and Regulation) Act, 1957, that prescribes the functions of central and state governments in regulating mineral resources in administration.
Regulations like the Mineral Concession Rules, 1960, and the Mineral Conservation and Development Rules, 1988, complement the Act by issuing guidelines on prospecting, mining, and protection of the environment. Despite such legislations being in the system, regulatory failure and human rights abuses in the mining communities occur, like in critical reporting of failure by regulation and in checking for compliance.
In response to these challenges, the government has been making efforts to strengthen control measures through e-governance and technological interventions such as satellite monitoring. There is also greater focus on involving local people in policing to prevent illegal mining. The Kerala Minor Mineral Concession Rules and state regulations are examples of efforts by state governments to control minor minerals. Overall, much has been done in policy and legislation, but effective implementation and enforcement will be important to making sustainable and responsible mining in India a reality
End Notes:
Good governance also involves fighting problems such as illegal artisanal mining, corruption, and abuse of power in the granting of mining licenses, which affects the right distribution of resources. In addition, there has been an increase in the adoption of local content policies in order to enhance sustainable employment and skills development in various communities. However, there is still difficulty balancing the needs of the country and those of foreign investors.
Externally, restrictive policies and regulations tend to limit foreign direct investment whereas overly relaxed ones permit abuse of resources and environmental damage. To solve this problem, many countries are changing their mining policies to integrate internationally accepted standards which focus on responsibility, long-term sustainability, and also active community participation.
Over the past few years, international projects like the Extractive Industries Transparency Initiative (EITI) have influenced national policies by fostering transparency, accountability, and stakeholder participation in the extractive industry. In the end, responsible mining governance should balance the need to attract investment, protect social and environmental interests, and ensure that resource abundance fosters sustained, equitable development.
Introduction
Indian mining is a sophisticated industry governed by a multilayered system of central and state government policies, legislation, and regulations. The Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), and its amendment constitute the fulcrum of mining laws. This law regulates the exploration and production of major minerals, whereas minor minerals are regulated by state governments according to their own rules, for example, the Kerala Minor Mineral Concession Rules, 2015.[1]
The MMDR Act has been amended numerous times, particularly in 2015 and 2020, to bring in transparency through competitive auctions for mineral concessions and to facilitate smooth changes in mining operations.
The regulatory system also consists of the Mineral Conservation and Development Rules, 1988, that uphold scientific mining and protection of the environment. The Mines Act, 1952, is also centered on labour and safety conditions in mines to ensure the well-being and security of workers.
Central regulatory agencies such as the Ministry of Mines, the Geological Survey of India, and the Indian Bureau of Mines are important to policy making, exploration, and regulation. State governments regulate minor minerals and enact laws to avoid illegal mining, like the Kerala Minerals (Prevention of Illegal Mining, Storage and Transportation) Rules, 2015.
Good regulatory systems are needed for the mining industry because it generates a high level of revenues and employment opportunities for states. The viability of the sector is also enhanced by schemes like the District Mineral Foundations (DMFs), [2]which invest mining revenues in local communities where mining is taking place.
Additionally, the government has implemented policies for promoting private sector involvement in exploration through nonexclusive reconnaissance licenses in order to spur mineral finds and economic growth. Generally speaking, the Indian regulatory framework is striving to provide balance between economic growth and environmental protection as well as social justice.
Laws and Regulations
The legal framework of India's mining industry is rooted in four fundamental legislative tools that together ensure organized mineral development, environmental sustainability, and employee safety:- Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act)
In India, the primary law that regulates the exploration and production of minerals is the MMDR Act. It was enacted to exercise control on the resources of minerals and regulates all minerals aside from the atomic and minor ones such as sand or gravel, which are under state control. Some of the provisions include Licensing and Leases that Provide processes to grant Mining Leases (MLs) and Prospecting Licenses (PLs).
The central government controls major minerals but regulates minor ones such as sand through the Kerala Minor Mineral Concession Rules, 2015. The amendments made in 2015 that ushered in auctions as a method for granting mineral concessions instead of discretionary allotments made the system more transparent.
It made it compulsory to set up District Mineral Foundations (DMFs) to harness mining royalties for local development alongside the National Mineral Exploration Trust (NMET) which finances exploration as well as the 2021 & 2023 amendments that streamlined the regimes to allow private sector involvement during reconnaissance and lifted end-use restrictions on traded minerals.
The 2023 amendment also streamlined procedures for critical minerals such as lithium and cobalt. It enforced the Ministry of Mines and Indian Bureau of Mines (IBM) which ensured adherence and compliance with scientific mining methods.
- Mineral Concession Rules, 1960
The Mineral Concession Rules (MCR), 1960, are a regulatory framework established under Section 13 of the Mines and Minerals (Development and Regulation) Act, 1957. The rules regulate mainly the processes of issue of reconnaissance permits, prospecting licenses, and mining leases. The rules define the terms and conditions on which the concessions or renewal of the concessions can be issued[3].
The MCR, 1960, also regulate how royalties are calculated and paid, and they outline the charges and fees on mining operations. Moreover, the regulations require reconnaissance permit holders or mining lease holders to submit reports and statements to provide for transparency and accountability in the mining industry. Before amendments of 2015, state governments used to have the authority to issue renewals of mining leases, but this clause has now been revised to simplify the process and avoid deemed extensions in case of second and subsequent renewals.
- Mineral Conservation and Development Rules, 1988
The Mineral Conservation and Development Rules (MCDR), 1988, are designed to guarantee that mining operations are carried out on a scientific basis, even as the environment is safeguarded. These regulations were framed under Section 18 of the Mines and Minerals (Development and Regulation) Act, 1957. They give directions for reconnaissance, prospecting, and mining activities, laying stress on environmental protection. [4]
The MCDR, 1988, mandate that mining lease holders undertake steps to avert pollution in prospecting, mining, beneficiation, or metallurgical operations. The regulations also provide for filing and reporting procedures concerning mining plans and activities, so that mining is carried out in a way that preserves minerals and has a low impact on the environment. Petroleum, natural gas, coal, lignite, and minor minerals are exceptions to the regulations.
- Mines Act, 1952
The Mines Act, 1952, is a complete law that addresses the health and safety of workers in mines. It specifies what is a mine and encompasses different categories of excavations and activities associated with the working of mineral mines. The Act authorizes inspectors to enforce safety standards and requires the furnishing of notices and records of mine workings. Coupled with the Mines Rules, 1955, it has elaborate rules for maintaining safe working conditions in mines. The Act covers aspects such as ventilation, lighting, and emergency preparedness to protect workers from hazards associated with mining activities.
- Metalliferous Mines Regulations, 1961,
Metalliferous Mines Regulations, 1961, are specific to metalliferous mines, excluding coal and oil mines. These regulations were formulated under Section 57 of the Mines Act, 1952, and apply across India. They include comprehensive safety requirements for metalliferous mining activities, such as ventilation, lighting, and the use of personal protective equipment. The regulations require owners of mines to submit statements outlining the management framework and safety controls in place.
Regulatory Bodies
The rule-making framework of India's mining industry is managed by a number of fundamental organizations, each with a unique role to maintain the industry operating effectively, safely, and sustainable that is:Ministry of Mines:
The Ministry of Mines is the public institution responsible for developing laws, policies and administrative procedures for the activities of a mine and its minerals. It controls the survey, exploration, and mining of all minerals excepting natural gas, petroleum, atomic minerals and coal. The Ministry works together with the state governments to implement these policies and ensure compliance with national standards. Additionally, it is responsible for integrating other departments and agencies toward effective overall coordination of mineral development and conservation.
-
Indian Bureau of Mines (IBM):
Indian Bureau of Mines acts as the state government's national regulator with its agenda centered on sanctioning mining plans and providing mineral conservation. IBM has custody of the National Mineral Inventory and advises state governments on mining activity and mineral conservation. IBM contributes to the advancement of systematic and scientific exploitation of mineral resources onshore and offshore. IBM engages in international cooperative programs for advancing regulatory mechanisms and mineral development practice.
-
Geological Survey of India (GSI):
The Geological Survey of India is mandated to carry out regional exploration and mapping of mineral resources. Founded in 1851, GSI is a leading geo-scientific organization that delivers vital information regarding mineral resources by carrying out ground, air-borne, and sea-based surveys. This information is vital for the identification of prospective mineral deposits, which are subsequently developed into auctionable blocks. GSI's activities facilitate strategic exploration of minerals, including strategic minerals such as lithium and graphite, to supply India's future requirements.
-
Directorate General of Mines Safety (DGMS):
The Directorate General of Mines Safety is the key health and safety regulator in the mining industry. It comes under the Ministry of Labour & Employment and is mandated to ensure safety standards are applied in mines. DGMS conducts regular inspections for enforcing safety regulations and mandates mine owners to keep proper safety records. It plays a vital function in safeguarding the health and well-being of mine workers throughout India by detecting and minimizing accident and disease risks at and around mines.
Worker Welfare and Safety
The Mines Act of 1952 is the fulcrum for health and safety regulations of miners in India. The Act has been framed with the intention to control the working conditions, to ensure safety, and the welfare of the miners. It ensures that the safety measures, such as proper ventilation, illumination, and provision of fire-fighting appliances, should be installed and enforced by mine operators in order to reduce dangers inherent in the process of mining.Regular inspections under the Directorate General of Mines Safety (DGMS) are performed to check enforcement of these provisions. In such inspections, governments examine whether the mines are abiding by defined safety standards and whether proper welfare facilities, like safe drinking water and sanitary lavatories, are made available for the workers[7].
Besides overall health and safety protocols, the Mines Act places priority on medical surveillance of miners. This involves compulsory medical tests at employment and regular health checks every five years or as often as the person is exposed to certain dangers, like asbestos. The Act provides that when a miner gets any disease caused by mining operations— like silicosis or pneumoconiosis—the mine owner is to inform the Chief Inspector of Mines and other competent authorities.
These medical examinations are vital for early diagnosis and prevention of occupational illness due to harmful work conditions. Through ensuring proper medical attention and monitoring of miners, the Act seeks to safeguard their health and ensure a safer workplace in the mine industry. As a whole, the Mines Act sets out a full code for the protection of workers' health and welfare employed in one of the most difficult areas of work.
District Mineral Foundation (DMF)
The District Mineral Foundation (DMF) is a statutory organization formed under the Mines and Minerals (Development and Regulation) Amendment Act, 2015. Its main aim is to work in the interest and benefit of individuals and regions impacted by mining-related activities. DMFs are established in districts where mining operations take place, and they are financed through contributions from major or minor mineral concession holders.[8]These contributions are usually a fraction of the royalty payments by mining companies. The amount of money raised by DMFs is used to carry out different developmental and welfare projects in miningaffected areas to counteract the negative effects of mining on the environment, health, and socio-economic conditions of local communities.
As regards rehabilitation and resettlement, DMFs adhere to the guidelines of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCTLARR) Act, 2013. The Act guarantees fair compensation and assistance to affected people during the process of land acquisition.
The RFCTLARR Act is also a requirement for the provision of rehabilitation and resettlement benefits to affected and displaced families that considers enhancing their social and economic welfare following land acquisition. DMFs complement this agenda by utilizing their funds to finance projects that aim to advance the living standards of mining-affected people and promote sustainable livelihoods. These encompass programs like access to clean water, health, education, and conservation of the environment, which are vital to the long-term health of these populations.
The Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) is one of the major government schemes that supplements activities conducted by DMFs. Initiated in 2015, PMKKKY seeks to use the funds from DMF for the execution of developmental projects and welfare schemes within mining-affected areas.
The program gives emphasis to high-priority sectors like drinking water supply, health, and education, as well as environmental conservation and sustainable livelihood generation [9] . Through the integration of these initiatives, DMFs are crucial in resolving past socio-economic imbalances and environmental issues related to mining operations, ensuring inclusive growth and sustainable development in affected areas.
Conclusion
Indian policy and regulation of mining are guided by a complex interaction of national and state-level laws, attempting to balance social and environmental responsibilities with economic development. The National Mineral Policy 2019 puts the emphasis on green mining priorities, stakeholder participation, and strong regulatory mechanisms to check illegal mining and ease of business.
The policy calls for one national agency to regulate mineral development and coordination, and also envisions gender sensitivity and value addition to the mining sector.
The law is commonly governed by the Mines and Minerals (Development and Regulation) Act, 1957, that prescribes the functions of central and state governments in regulating mineral resources in administration.
Regulations like the Mineral Concession Rules, 1960, and the Mineral Conservation and Development Rules, 1988, complement the Act by issuing guidelines on prospecting, mining, and protection of the environment. Despite such legislations being in the system, regulatory failure and human rights abuses in the mining communities occur, like in critical reporting of failure by regulation and in checking for compliance.
In response to these challenges, the government has been making efforts to strengthen control measures through e-governance and technological interventions such as satellite monitoring. There is also greater focus on involving local people in policing to prevent illegal mining. The Kerala Minor Mineral Concession Rules and state regulations are examples of efforts by state governments to control minor minerals. Overall, much has been done in policy and legislation, but effective implementation and enforcement will be important to making sustainable and responsible mining in India a reality
End Notes:
- Department of Mining and Geology, Mining Laws, https://dmg.kerala.gov.in/mining-laws/
- Neeraj Menon and Karthy Nair, India, https://trilegal.com/wp-content/uploads/2022/01/India-Chapter-onMining-Industry-2020.pdf
- Ministry of Mines, Mineral Concession Rules, https://pib.gov.in/newsite/PrintRelease.aspx?relid=133177
- Mineral Conservation and Development Rules, 1988, https://www.tutorialspoint.com/mineral-conservationand-development-rules-1988
- Indian Bureau of Mines, Nagpur, https://ibm.gov.in/IBMPortal/pages/Functions
- Directorate General of Mines Safety, https://www.dgms.gov.in/UserView/index?mid=1261
- Akella Poornima, The Mines Act, 1952, https://blog.ipleaders.in/the-mines-act-1952-a-comprehensive-analysis/
- Biswajit Biswal, Mining for Progress, https://www.allcommercejournal.com/article/349/5-2-38-120.pdf
- District Simdega, District Mineral Foundation Trust, Simdega, https://simdega.nic.in/en/dmft/
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