On October 1, 2021, the Ministry of Coal, Government of India, notified the Mineral Concession (Amendment) Rules, 2021 (“Amendment Rules”). The Amendment Rules brought certain important additions/ amendments, inter-alia, with respect to the time period for which a mining lease can be granted to Government companies or corporations and in what manner can a lessee of a captive mine sell coal or lignite.
Some of the key distinctions between the Mineral Concession Rules, 1960 and the Amendment Rules have been identified below:
S.N. |
Mineral Concession Rules, 1960 |
Mineral Concession (Amendment) Rules, 2021 |
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After Rule 24B, the following rule has been inserted:
“24C. Period of mining lease granted to Government companies or corporations.— (1) All mining leases granted on or after the commencement of the Mineral Concession (Amendment) Rules, 2021 to a Government company or corporation for coal or lignite shall be for a period of fifty years. (2) All subsisting mining leases vested or granted to a Government company or corporation before commencement of 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. (3) The State Government, upon an application made to it in this behalf by the Government company or corporation at least three months prior to the expiry of the mining lease, shall extend the period of the mining lease for a further period of twenty years at a time: Provided that the State Government may condone the delay in application for extension made after the prescribed time limit: Provided further that no extension of period of mining lease shall be granted to a Government company or corporation that has been selected through auction. (4) …. (5) ….”. |
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After Rule 27, the following rule has been inserted:
“27A. Manner of sale of coal or lignite by the lessee of a captive mine.? (1) Any lessee may, where coal or lignite is used for captive purpose, sell coal or lignite up to such per cent. of the total coal or lignite produced in a financial year, as allowed under sub-section (5) of section 8, after meeting the requirement of the end use plant linked with the mine. Explanation 1.- For the purpose of this rule it is clarified that the requirement of the end use plant linked with the mine for a financial year shall be the actual quantity of coal or lignite consumed in the said plant in that financial year or a part thereof. Explanation 2.- For the purpose of this rule, quantity of coal or lignite produced, sold, utilised in linked end-use plant and the payment of additional amount on the quantity sold shall be assessed on run-of-mine basis. Explanation 3.- Sale of any tailings, rejects or middlings shall not be restricted by this rule. (2) For the quantity of coal or lignite sold in accordance with sub-section (5) of section 8, the lessee shall pay to the State Government, at the time of payment of royalty, 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, wherever applicable. (3) …. (4) ….”. |
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Earlier Rule 28
“28. Lapsing of leases :- (1) Subject to the conditions of this rule where mining operations are not commenced within a period of two years from the date of execution of the lease, or is discontinued for a continuous period of two years after commencement of such operations, the State Government shall, by an order, declare the mining lease as lapsed and communicate the declaration to the lessee. (2) Where a lessee is unable to commence the mining operation within a period of two years from the date of execution of the mining lease, or discontinues mining operations for a period exceeding two years for reasons beyond his control, he may submit an application to the State Government, explaining the reasons for the same, at least three months before the expiry of such period; (3) ….; (4) ….:”. |
Substituted Rule 28
“28. Lapsing of Leases.? (1) Where production and dispatch has not commenced within a period of two years from the date of execution of the mining lease or is discontinued for a continuous period of two years after commencement of production or dispatch, 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) Where a lessee is unable to commence the production and dispatch within a period of two years from the date of execution of the mining lease or discontinuation of production and dispatch for reasons beyond his control, he may submit an application to the State Government, requesting for an extension of such period of two years by a further period not exceeding one year, explaining the reasons for the same, at least three months before the expiry of such period of two years: Provided where the lessee has failed to make the application within the time stipulated above, the lease shall lapse on expiry of the period of two years. (4) Application made under sub-rule (3) shall specify- (a) the reasons on account of which it will not be possible for the lessee to undertake mining operations or continue production and dispatch; (b) the manner in which such reasons are beyond the control of the lessee; (c) the steps that have been taken by the lessee to mitigate the impact of such reasons; and (d) the period of extension sought. (5) …. (6) …. (7) ….”. |
Please find attached a copy of the Amendment Rules.
This update has been contributed by Nidhi Arya (Partner) and Avin Sarkar (Associate).
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