The Government of India has notified the Mines and Minerals (Development and Regulation) Amendment Act, 2016 (the Amendment Act) which amends Section 3 (a) of the Mines and Minerals (Development and Regulation) Act, 1957 (the Act) to include non – mineralised area around the mines so as to enable proper conduct of operations by the concessionaire. The Amendment Act amends Section 12A of the Act to allow transfer of mining lease granted otherwise than under an auction being used for captive purposes, subject to payment of transfer charges. Further, the Amendment Act amends Section 13 to allow the Government of India to frame rules with regard to prescribing limits for such transfer charges.
The Government of India has also notified the Minerals (Transfer of Mining Lease Granted Otherwise than through Auction for Captive Purpose) Rules, 2016 (the Transfer Rules) on May 30, 2016. Rule 4 of the Transfer Rules provides for the conditions of transfer including that such transfer of mining lease granted otherwise than through auction is used for captive purposes. Further, the transfer of such mining lease would be subject to the transfer of the conditions and liabilities which form part of the consents, approvals and permits. For the purpose of transfer, an application has to be filed to the State Government, in the format provided under Schedule I of the Transfer Rules. The State Government shall approve or reject such applications within a period of ninety days from the date of the application. If the application is accepted the transferee of the lease shall have to make an upfront payment of 0.50% of the value of the estimated resources. After making such payment, the transferee and the State Government shall execute the Mine Development and Production Agreement, a transfer deed and shall provide performance security to the State Government of 0.50% of the value of the estimated resources and shall also pay royalty.
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