Mines and Minerals (Development and Regulation) (MMDR) Amendment Bill,2021 – UPSC GS2

Lok Sabha passes the Mines and Minerals (Development and Regulation) (MMDR) Amendment Bill,2021. The Bill seeks to amend the Mines and Minerals (Development and Regulation) Act, 1957. This act regulates the mining sector in India.
What are the key provisions of the Bill?
  • Removes distinction between captive and non-captive mines
    • The Act empowered the central government to reserve any mine (other than coal, lignite, and atomic minerals) for particular end-use. Such mines are known as captive mines.
    • The Bill removes the distinction between captive and non-captive mines. It provides that no mine will be reserved for particular end-use. All mines will now be able to sell their extra minerals.
  • Sale of minerals by captive mines: The Bill provides that captive mines (other than atomic minerals) may sell up to 50% of their annual mineral production in the open market after meeting their own needs.
  • National Mineral Exploration Trust (NMET): The bill provides for the constitution of a Statutory body named the National Mineral Exploration Trust (NMET). It will see the functioning of the mining sector.
  • National Mineral Index(NMI): The bill proposes to introduce an index-based mechanism by developing a National Mineral Index(NMI). It will be used for various statutory payments and for future auctions.
  • Transfer of statutory clearances: Presently, upon expiry of mining lease and transfer of the lease to a new lessee, the statutory clearances issued to the previous lessee are transferred for a period of two years. The new lessee needs to obtain fresh clearances within the two years.
    • The Bill changes this provision. It makes the transferred statutory clearances valid throughout the lease period of the new lessee.
  • Inclusion of Private Sector: The bill allows the participation of private players in mining operations with enhanced technology.
  • Auction by the central government in certain cases: The Bill provides that if the State Government is not able to complete the auction process within a specified time, the Central Government may take over and conduct such an auction.
  • Allocation of mines with expired leases: The Bill says that mines (other than coal, lignite, and atomic minerals) whose lease has expired, may be allocated to a government company in certain cases.
Significance of this bill:
  • Brings True Potential of Mining Sector: India’s mining sector has the same potential as South Africa and Australia. However, India still needs to import minerals like gold and coal. This bill will bring out the true potential of the mining sector.
  • Increased Mining Contribution to GDP: Mining sector right now contributes 1.75% to the country’s GDP. The proposed reforms will raise the contribution to 2.5% as it seeks to make many mines available for auctions by resolving legacy issues.

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