MMDR Act

The Kerala government has expressed its opposition to a new set of proposed amendments to the Mines and Minerals (Development and Regulation) Act.

About the MMDR Act –

• It is an Act of the Parliament of India enacted in 1957, which forms the basic framework of regulating the mining sector in India and mandates the requirement for granting leases for mining operations.
• The Ministry of Mines, Government of India, is responsible for the administration of the Act.
• It describes the procedure and terms for obtaining a mining or prospecting licence in India. Prior approval from the Ministry of Environment and Forests is required for mining on forest land.
• This act is applicable to all minerals except minor minerals (such as river sand, which is under the purview of state governments) and atomic minerals.

What are the recent amendments?

• Prior to 2015, mineral resources were granted on a “first-come, first-served” basis, which was discretionary and decision making was opaque.
• The process of renewing mining leases was proving to be an impediment to attracting large-scale investment in the mining sector.
• Starting 2015, the Indian government carried out a series of major reforms in the mining sector.
• The MMDR Amendment Act, 2015 — The Act was comprehensively amended in 2015 to bring several reforms in the mineral sector, notably —
  • • Mandating auction of mineral concessions to improve transparency.
    • Establishing District Mineral Foundation and National Mineral Exploration Trust.
    • Stringent penalty for illegal mining.
• The Act was further amended in 2016 and 2020 to allow lease transfers for non-auctioned captive mines and to address the emerging issue of lease expiry.
• Furthermore, the MMDR Amendment Act, 2021, has been adopted to propel India into a 5-trillion-dollar economy and to double the job potential in the next five years by –
  • • Revitalising the mineral sector and by giving immediate boost to mineral production.
    • Promoting ease of doing business.
    • Other structural reforms.

What are the proposed amendments?

• To separate 8 groups of minerals —
  • • As per the proposal, 8 out of 12 groups of minerals will be removed from Part B of the first Schedule (critical & strategic minerals) of MMDR Act.
    • They include lithium-bearing minerals, minerals of the ‘rare earths’ group containing uranium and thorium, beach sand minerals, etc.
    • It has been proposed to create a new part (part D) in the first Schedule and place the 8 minerals along with others like indium, gallium, graphite, nickel, cobalt and tin.
• Concurrent powers to the Union government — The amendments will empower the Union government, along with the State governments, to sanction mining rights of minerals listed under Part D of the first schedule.

Criticism of the proposed amendments –

• As per MMDR Act and Mineral Concessions Rules, mining and the manufacture of value-added products should remain in the public sector.
  • • According to the critics, some among the 8 minerals had great strategic importance, alleging that the proposal is an attempt to privatise the critical sector.
    • The proposals may lead to improper handling of strategically important minerals such as uranium by select private companies and is against the national interest.
• Under Entry 23 of List II (State List) and Article 246(3) of the Indian Constitution, State Assemblies can make laws on such minerals.
  • • According to the Kerala government, the amendments are a breach of States’ rights as minerals come under the purview of States.
    • Kerala is endowed with rich resources of Beach Sand Minerals (Monazite – primary source of thorium) and some of them are significant for their economy and have strategic importance too.