Regulations regarding mining leases granted to government companies notified vide Mineral Concession (Amendment) Rules, 2021

The Ministry of Coal has notified Mineral Concession (Amendment) Rules, 2021 on August 6, 2021. It amends the Mineral Concession Rules, 1960.

Key amendments made by the Mineral Concession (Amendment) Rules, 2021, are:

• Definition:

“run-of-mine” means the raw, unprocessed or uncrushed material in its natural state obtained after blasting or digging, from the mineralised zone of a lease area [Rule 2(1) (viia)]

• Period of mining lease granted to Government companies or corporations:

1. All mining leases shall be for a period of 50 years, granted on or after commencement of the Mineral Concession (Amendment) Rules, 2021 to a Government company or corporation for coal or lignite. All existing mining leases granted before commencement the Mineral Concession (Amendment) Rules, 2021 for coal or lignite shall be deemed to have been granted for fifty years or till 31st March 2030, whichever is later.
2. The State Government, upon an application made to it at least three months prior to the expiry of the mining lease, shall extend the period of the mining lease for twenty years at a time.
3. The pending applications for renewal of mining lease as on the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2021 shall be deemed to be applications for extension of the period of the mining lease. [Rule 24C].

• Manner of sale of coal or lignite by the lessee of a captive mine:

1. Any lessee may sell coal or lignite up to such per cent. of the total coal or lignite produced in a financial year, as allowed under S. 8(5), after meeting the requirement of the end use plant linked with the mine.
2. The lessee shall pay to the State Government for the quantity of coal sold, an additional amount as specified in the Sixth Schedule of the Act, which shall be in addition to royalty or payment to the District Mineral Foundation and National Mineral Exploration Trust or any other statutory payment or payment specified in the tender document or the auction premium.
3. The lessee shall submit to the Nominated Authority, Ministry of Coal, Coal Controller’s Organization and to the State Government, a self-declaration in Form ‘R’ within one month of the end of a financial year, for sale made in the previous financial year.
4. Sale of coal shall not be allowed from the coal mines allotted to a company or corporation that has been awarded a power project on the basis of competitive bid for tariff (including Ultra Mega Power Projects). [Rule 27A]

• Lapsing of Leases:

1. The mining lease shall lapse on the expiry of the period of two years from the date of execution of the lease or, as the case may be, discontinuance of the production and dispatch.
2. The lapsing of the mining lease shall be recorded through an order issued by the State Government and shall also be communicated to the lessee.
3. The Lessee may submit an application to the State Government, requesting for an extension of the period of such two years by a further period not exceeding one year, explaining the reasons for delay in execution of mining lease. [Rule 28]

• Payment of royalty in case of minerals subjected to processing:

The royalty shall be charged on run-of-mine coal or lignite irrespective of its processing within or outside the leased area and it shall be payable at the time of dispatch from or consumption within the leased area. [Rule 64B].

*Tanvi Singh, Editorial Assistant has reported this brief.