Including Non-Mineralised Areas in Mining Leases

Recent Policy Change: Including Non-Mineralised Areas

The Centre has recently permitted state governments to incorporate non-mineralised areas within existing mining leases. This crucial change allows these areas to be used for activities such as dumping mine waste and overburden.

Legal Basis for the Policy Clarification

The Ministry of Mines clarified that the inclusion of non-mineralised areas for ancillary activities like waste disposal is permissible under the existing legal framework.

Supreme Court Rulings: Regulating Mining and Minerals

The Supreme Court has delivered several landmark judgments shaping the regulatory landscape of India's mining sector, particularly concerning the division of powers between the Centre and states.

Historical Ruling: Centre's Primary Authority (1989)

In 1989, a seven-judge Bench in the case of Orissa Cement Ltd. vs the State of Tamil Nadu ruled that mineral regulation falls primarily under the Centre’s authority.

State Authority on Taxes (Pre-2024)

In State of Orissa v. M.A. Tulloch & Co., it was held that states could only collect royalties, not impose additional taxes, as royalties were then classified as taxes.

A 2004 judgment in State of West Bengal v. Kesoram Industries Ltd. Case questioned this classification, leading to a review by a larger bench.

Overruling the 1989 Verdict: States' Power to Tax (July 2024)

In July 2024, the Supreme Court delivered a significant ruling, overturning its 1989 judgment. This new verdict asserted the states' power to tax mineral rights under Entry 50 of List II (State List).

While granting this power, the Court limited Parliament’s role to imposing constraints to ensure that mineral development is not hindered. Some judges, however, expressed concerns that unchecked state taxation could disrupt federal uniformity in mineral pricing and development, urging Parliament to intervene for consistency.

Goa Foundation v. Union of India Case, 2014: Against External Dumping

The Supreme Court in the Goa Foundation v. Union of India Case, 2014, issued a strict directive against dumping mine waste or overburden outside the boundaries of valid mining leases.

Impact on Mining Practices (Post-2014)

Following the Goa Foundation ruling, mining operations were mandated to include waste management strategies strictly within their leased areas. This prompted significant changes in planning and allocation processes within the industry.

Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act)

The MMDR Act, 1957, is the pivotal legislation governing India’s mining sector. Its primary objective is to develop the industry, conserve minerals, and ensure transparency and efficiency in mineral exploitation.

Initial Objectives of MMDR Act

Initially, the Act focused on promoting mining, conserving resources, and regulating concessions through a system of licenses and leases.

2015 Amendment: Key Reforms

The 2015 Amendment introduced significant reforms to the MMDR Act, enhancing transparency and social responsibility.

• Auction Method: Introduced for granting mineral concessions, promoting transparency.
• District Mineral Foundation (DMF): Established to work for the welfare of mining-affected areas.
• National Minerals Exploration Trust (NMET): Created to boost exploration activities.
• Stringent Penalties: Imposed for illegal mining to deter unauthorized extraction.

2021 Amendment: Captive Mines Liberalization

The 2021 Amendment brought further changes, particularly for captive mines. These mines are operated by companies to extract minerals for their own industrial use.