Mining Laws, Mineral Concessions and Regulatory Bodies in India

India holds reserves of metallic, non-metallic, and energy minerals across its diverse geological terrain. The mining sector supplies essential raw materials for manufacturing, infrastructure, power generation, and clean energy transitions. Regulation of mining in India is shared between the Central Government and State Governments based on constitutional provisions.

Constitutional and Policy Framework

The Constitution of India distributes authority over mineral resources between the Union and the States under the Seventh Schedule.

Constitutional Allocations

• Entry 54 of List I (Union List) empowers the Central Government to regulate mines and mineral development to the extent declared by Parliament by law in the public interest.
• Entry 23 of List II (State List) gives State Governments jurisdiction over regulation of mines and mineral development, subject to the provisions of List I.
• Mineral ownership generally vests in the State Governments within their boundaries, while offshore minerals in territorial waters and Exclusive Economic Zones vest in the Union.

National Mineral Policy 2019

• The policy replaced the 2008 policy to promote sustainable development, attract private investment, and streamline mineral administration.
• It introduced the concept of Exclusive Mining Zones and simplified the process for granting mineral concessions.
• It emphasized long-term stability in tax structures and established a dedicated inter-ministerial body to monitor mineral development.

Primary Statutory Legislation

Mining operations in India follow specific statutes covering terrestrial and offshore areas.

Mines and Minerals (Development and Regulation) Act, 1957

• The MMDR Act, 1957 serves as the primary legislation governing the mining sector on land.
• The 2015 Amendment introduced mandatory competitive auctions for granting mineral concessions through electronic bidding.
• The 2021 Amendment removed the distinction between captive and merchant mines, allowing captive mines to sell up to 50% of their annual production in the open market.
• The 2023 Amendment declassified six minerals, including lithium, beryllium, niobium, titanium, tantalum, and zirconium, from the atomic minerals list to allow private sector participation.
• The 2023 Amendment created Part D in the First Schedule for critical and strategic minerals, empowering the Central Government to conduct auctions for their concessions.

Other Key Mining Laws

• Offshore Areas Mineral Development and Regulation Act, 2002 governs mineral resources in territorial waters, continental shelf, and exclusive economic zones. The 2023 Amendment introduced competitive auctions for offshore mineral blocks.
• Mines Act, 1952 regulates labor safety, working conditions, health, and welfare of workers in mines.
• Coal Mines (Special Provisions) Act, 2015 provides rules for the allocation and auction of coal mines.

Types of Mineral Concessions

Mineral concessions represent statutory permissions granted by the government to explore or extract minerals.

Major Regulatory and Administrative Bodies

Multiple ministries, specialized agencies, and technical organizations oversee mineral administration and enforcement in India.

Central Ministries and Statutory Agencies

• Ministry of Mines: Formulates policies, laws, and regulations for non-coal, non-fuel, and non-atomic minerals.
• Ministry of Coal: Oversees the development and allocation of coal and lignite reserves.
• Ministry of Petroleum and Natural Gas: Regulates exploration and extraction of liquid and gaseous hydrocarbons.
• Indian Bureau of Mines (IBM): Functions as a statutory technical organization under the Ministry of Mines to promote conservation, scientific development of mineral resources, and protection of the environment.
• Geological Survey of India (GSI): Functions as the premier agency for regional geological mapping and mineral resource assessment.
• Directorate General of Mines Safety (DGMS): Operates under the Ministry of Labour and Employment to enforce safety standards under the Mines Act, 1952.

Welfare and Exploration Funds

• District Mineral Foundation (DMF): Statutory non-profit trust set up in every mining-affected district under Section 9B of the MMDR Act. Funded through contributions from miners to implement local development projects.
• National Mineral Exploration Trust (NMET): Established under Section 9C of the MMDR Act to fund regional and detailed mineral exploration. Miners contribute 2% of the royalty paid to this fund.

Core Mining Sector Facts

• India ranks as the second largest producer of coal and crude steel in the world.
• Minor minerals like sand, gravel, and building stones are fully regulated by State Governments under Section 15 of the MMDR Act, 1957.
• Atomic minerals specified under Part B of the First Schedule are reserved for state-owned public sector undertakings, except for declassified critical minerals.
• The 2023 MMDR Amendment introduced the Seventh Schedule listing 29 deep-seated and critical minerals eligible for Exploration Licences.
• Revenue generated from central auctions of critical minerals goes directly to the concerned State Governments.
• Royalty rates for major minerals are fixed by the Central Government, while State Governments collect the royalty payments.
• The Sustainable Development Framework for the mining sector uses a star-rating system managed by the Indian Bureau of Mines to evaluate environmental compliance.
• Offshore mining blocks are auctioned under the amended Offshore Areas Mineral Development and Regulation Act to utilize marine mineral resources.