Page 8 - The Mineral Development and Regulation Framework in India (English Version)
P. 8
Discussion Paper
November 2011, was referred to the Department– provisions such as Section 11(5) of the MMDR
related Parliamentary Standing Committee which Act.”
after eliciting the views of all stakeholders, submitted
its Report in May 2013. The Report, while broadly The fact is that competition is always in respect of an
endorsing the framework of the legislation also object of value. Where mineralization is known and
suggests certain important changes. However, the Bill a tangible value can be attached to it, a competitive
itself lapsed on dissolution of the Lok Sabha. process can be structured, having regard to technical
considerations. In India, the Obvious Geological
Given the problems besetting the sector, and given Potential (OGP) area is 570,000 sq km. There
also the urgent need to attract investment, particularly are many areas where there is no scientific and
the FDI into the sector, a new legislative framework quantitative knowledge of mineralization, especially
is urgently needed. It is important however to keep in a potentially multi-mineral situation where many
in view the issues arising from the Hoda Committee of the minerals are likely to be located deep below
Report and the directions laid out in the National Mineral the surface (i.e., 50–300 metres or more). Given the
Policy 2008, and ensure that the legislation builds on the statutory restrictions imposed with respect to the
accumulated learning rather than “reinvent the wheel”. maximum area that can be held by a person/company
Some of these issues are discussed below. Since specific at a time, etc., the actual scarcity value at this stage
terminology is involved, a glossary of terms is given in attaches to the exploration budget and not the land or
Appendix 1. the mineral, and therefore, in essence, the parcels of
pre-potential areas are competing (based on available
The “First-in-Time” principle geological data) for scarce exploration budgets!
The issue of “first-in-time” or “first-come-first- In the context of exploration for deep-located
served” in respect of HTREL/PL was actually analysed minerals using expensive high technology, the
in detail by the Hoda Committee, which observed competition is essentially for exploration budgets
the following in this regard: funded from venture capital. Such venture capital
will not wait for complex and time-consuming
1.63 “The Committee feels that it is important procedures. A simple and transparent system of grant
to ensure strict adherence to the tried and tested of concession in such cases is the obvious answer, and
and globally adopted first-in-time principle in the world over, the first-in-time principle is used.
the mining sector. In view of the fact that the
Committee is recommending an ‘open sky’ policy
for grant of non-exclusive RPs, which would not
give the RP holders any priority in getting PLs,
the only incentive offered to such RP holders
would be the assurance offered by the first-in-
time principle. Therefore, for the confidence of
investors in such RPs, strict application of the
first-in-time principle would be imperative. Not
granting PL for an area to the RP holder who is
the first to discover mineral occurrences in that
area will discourage reconnaissance operations
from being undertaken, turn away investors, and
lead to areas remaining unexplored. Therefore,
the first-in-time principle has to be made strictly
applicable in the grant of PLs in non-exclusive RP
cases and there is a need to delete discretionary
8 JANUARY 2015
November 2011, was referred to the Department– provisions such as Section 11(5) of the MMDR
related Parliamentary Standing Committee which Act.”
after eliciting the views of all stakeholders, submitted
its Report in May 2013. The Report, while broadly The fact is that competition is always in respect of an
endorsing the framework of the legislation also object of value. Where mineralization is known and
suggests certain important changes. However, the Bill a tangible value can be attached to it, a competitive
itself lapsed on dissolution of the Lok Sabha. process can be structured, having regard to technical
considerations. In India, the Obvious Geological
Given the problems besetting the sector, and given Potential (OGP) area is 570,000 sq km. There
also the urgent need to attract investment, particularly are many areas where there is no scientific and
the FDI into the sector, a new legislative framework quantitative knowledge of mineralization, especially
is urgently needed. It is important however to keep in a potentially multi-mineral situation where many
in view the issues arising from the Hoda Committee of the minerals are likely to be located deep below
Report and the directions laid out in the National Mineral the surface (i.e., 50–300 metres or more). Given the
Policy 2008, and ensure that the legislation builds on the statutory restrictions imposed with respect to the
accumulated learning rather than “reinvent the wheel”. maximum area that can be held by a person/company
Some of these issues are discussed below. Since specific at a time, etc., the actual scarcity value at this stage
terminology is involved, a glossary of terms is given in attaches to the exploration budget and not the land or
Appendix 1. the mineral, and therefore, in essence, the parcels of
pre-potential areas are competing (based on available
The “First-in-Time” principle geological data) for scarce exploration budgets!
The issue of “first-in-time” or “first-come-first- In the context of exploration for deep-located
served” in respect of HTREL/PL was actually analysed minerals using expensive high technology, the
in detail by the Hoda Committee, which observed competition is essentially for exploration budgets
the following in this regard: funded from venture capital. Such venture capital
will not wait for complex and time-consuming
1.63 “The Committee feels that it is important procedures. A simple and transparent system of grant
to ensure strict adherence to the tried and tested of concession in such cases is the obvious answer, and
and globally adopted first-in-time principle in the world over, the first-in-time principle is used.
the mining sector. In view of the fact that the
Committee is recommending an ‘open sky’ policy
for grant of non-exclusive RPs, which would not
give the RP holders any priority in getting PLs,
the only incentive offered to such RP holders
would be the assurance offered by the first-in-
time principle. Therefore, for the confidence of
investors in such RPs, strict application of the
first-in-time principle would be imperative. Not
granting PL for an area to the RP holder who is
the first to discover mineral occurrences in that
area will discourage reconnaissance operations
from being undertaken, turn away investors, and
lead to areas remaining unexplored. Therefore,
the first-in-time principle has to be made strictly
applicable in the grant of PLs in non-exclusive RP
cases and there is a need to delete discretionary
8 JANUARY 2015
