Page 1 - The Mineral Development and Regulation Framework in India (English Version)
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DISCUSSION PAPERT E R I P o l i c y B r i e f January 2015
The Energy and Resources Institute
The Mineral Development
and Regulation
Framework in India
Reforming the Concession Grant System
Authors SUMMARY
• S Vijay Kumar, Distinguished Fellow, TERI
• Nidhi Srivastava, Fellow, TERI The Paper highlights the governance and regulation issues that need to
With contributions from: be addressed as part of the reform of the mineral concession system.
• Suneel Pandey, Associate Director, TERI Also it brings out the merits of bidding and first-in-time systems in their
• Nitya Nanda, Fellow, TERI specific contexts. The difficulties of resource estimation and valuation in
• Veena Aggarwal, Fellow, TERI bidding systems are analysed. The paper underlines the need to ensure
that the mineral concession system, on one hand, promotes scientific
The Energy and Resources Institute mining within a sustainable development framework, and on the other,
Darbari Seth Block, IHC Complex, incentivizes exploration and induction of advanced technologies for the
Lodhi Road, New Delhi-110 003 purpose, and also ensures that the State gets a fair value for the minerals
Tel. 2468 2100 or 4150 4900 extracted.
Fax. 2468 2144 or 2468 2145
India +91 Delhi (0) 11 The Paper concludes that a first-in-time system is necessary to promote
exploration in a high risk environment by providing commensurate rewards;
and that given the current uncertainties in the state of knowledge of our
mineral resources, a sliding-scale ad-valorem royalty may be better than
bidding to optimize revenues while ensuring business confidence and a
level playing field.
Introduction
Entry no. 23 of List II (State List) of the Constitution provides for
“Regulation of mines and mineral development subject to the provisions
of List I with respect to regulation and development under the control of
the Union”. Correspondingly, entry no. 54 of List I (Union List) of the
Constitution provides for “Regulation of mines and mineral development
to the extent to which such regulation and development under the control
of the Union is declared by Parliament by law to be expedient in the public
interest”. Thus, though the States are the owners of the minerals and
royalty also accrues to them, Parliament has the power in the public
interest to regulate the mining sector.
www.teriin.org
The Energy and Resources Institute
The Mineral Development
and Regulation
Framework in India
Reforming the Concession Grant System
Authors SUMMARY
• S Vijay Kumar, Distinguished Fellow, TERI
• Nidhi Srivastava, Fellow, TERI The Paper highlights the governance and regulation issues that need to
With contributions from: be addressed as part of the reform of the mineral concession system.
• Suneel Pandey, Associate Director, TERI Also it brings out the merits of bidding and first-in-time systems in their
• Nitya Nanda, Fellow, TERI specific contexts. The difficulties of resource estimation and valuation in
• Veena Aggarwal, Fellow, TERI bidding systems are analysed. The paper underlines the need to ensure
that the mineral concession system, on one hand, promotes scientific
The Energy and Resources Institute mining within a sustainable development framework, and on the other,
Darbari Seth Block, IHC Complex, incentivizes exploration and induction of advanced technologies for the
Lodhi Road, New Delhi-110 003 purpose, and also ensures that the State gets a fair value for the minerals
Tel. 2468 2100 or 4150 4900 extracted.
Fax. 2468 2144 or 2468 2145
India +91 Delhi (0) 11 The Paper concludes that a first-in-time system is necessary to promote
exploration in a high risk environment by providing commensurate rewards;
and that given the current uncertainties in the state of knowledge of our
mineral resources, a sliding-scale ad-valorem royalty may be better than
bidding to optimize revenues while ensuring business confidence and a
level playing field.
Introduction
Entry no. 23 of List II (State List) of the Constitution provides for
“Regulation of mines and mineral development subject to the provisions
of List I with respect to regulation and development under the control of
the Union”. Correspondingly, entry no. 54 of List I (Union List) of the
Constitution provides for “Regulation of mines and mineral development
to the extent to which such regulation and development under the control
of the Union is declared by Parliament by law to be expedient in the public
interest”. Thus, though the States are the owners of the minerals and
royalty also accrues to them, Parliament has the power in the public
interest to regulate the mining sector.
www.teriin.org
