Significant Steps: Recent developments in mining

Recent developments in mining

The mining sector in India has undergone a major overhaul in recent years. Over the past two to three years, several developments have shaped the sector. These include a ban on mining activity in some states, the deallocation of coal blocks (eventually followed by the lifting of the ban and fresh auctions of blocks), and the introduction of new policy measures such as the Mines and Minerals (Development and Regulation) [MMDR] Amendment Act, 2015, the MMDR Amendment Act, 2016, the National Mineral Exploration Policy, etc. These measures aim at providing a level playing field to players and reviving activity in the mining sector, the backbone of economic growth. Some of the key initiatives in the sector have been discussed below.

Slew of policy measures announced: A slew of policy measures have been introduced to address the long-pending issues in the sector and thus lead to its revival. The MMDR Amendment Act, 2015, was expected to be a game-changer as it replaces the first come, first served/discretionary mechanism for granting mining leases for mineral resources by a transparent and competitive auction process. However, an issue with the MMDR Amendment Act, 2015 was that it permitted the transfer of mining leases for auctioned mines only and not for mines allocated through the discretionary process. To address this, the MMDR Amendment Act, 2016 was notified on May 6, 2016.

Another noteworthy policy measure was the approval of the National Mineral Exploration Policy in June 2016. The policy aims to accelerate exploration activity through enhanced private sector participation.

The Ministry of Mines also plans to auction identified blocks for exploration by the private sector on a revenue-sharing basis in the event their exploration reveals auctionable resources. The government has also detailed the rules for the auctions as well as the draft rules for mineral concessions. For coal, the allocations are already being made via the competitive auction process.

E-auction of captive coal blocks: The Ministry of Coal commenced coal block auctions in December 2014. As of August 2016, three rounds of auctions, awarding 31 coal blocks, had been conducted.

In December 2015, the ministry cancelled the fourth round of coal block auctions (for blocks earmarked for the unregulated sectors) owing to a tepid response in terms of the number of bids submitted as well as the bid amount. This is primarily attributed to increased coal supply in the country and low demand from the steel industry. The fourth round of auctions is likely to be undertaken once the market improves.

Another significant development in the coal mining segment is the Cabinet Committee on Economic Affairs’ (CCEA) approval of the allotment of coal mines to central and state public sector undertakings for commercial mining. The CCEA has done away with the end-use restriction to allow the sale of coal from these blocks to medium, small and cottage industries under the provisions of the Coal Mines (Special Provisions) Act, 2015.

Introduction of TAMRA: The Ministry of Mines has recently launched the Transparency, Auction Monitoring and Resource Augmentation (TAMRA) portal and mobile application across 12 mineral-rich states, the mining officers of which will also be connected through videoconferencing. This initiative, taken to promote ease of doing business, is aimed at speeding up mining activity in the country while also enabling stakeholders to track the status of statutory clearances vital for acquiring mining blocks. The interactive platform will also help reduce the gestation period for commencing operations through the reduced time frame for obtaining clearances through this portal. Going forward, the government also plans to amend the mining rules to introduce greater transparency while awarding exploration and mining licences for the 100 offshore mineral blocks already identified for allocation.

Launch of the Mining Surveillance System: The Ministry of Mines recently launched the Mining Surveillance System (MSS) to track illegal mining activity via remote sensing technology. The MSS was developed by the Indian Bureau of Mines (IBM) and the Bhaskaracharya Institute for Space Applications and Geoinformatics, in association with the Ministry of Electronics and Information Technology. Once installed, the system will issue an alert for any illegal mining activity within 500 metres of the mining lease area boundary for major minerals including iron ore and bauxite. Thereafter, state officials will have a week’s time to take action. Going forward, the Ministry of Mines also plans to seek data related to minor minerals from the states which may be included under the MSS.

In the MSS, cadastral maps of mining leases are scanned and georeferenced with satellite maps, and then digitised by the IBM. The georeferenced mining leases are superimposed on remote sensing scenes obtained from the National Remote Sensing Centre via CARTOSAT, one of India’s remote sensing satellites. A mobile application has also been developed, which aims to establish a participative monitoring system through which people can report unusual mining activity.

Mineral blocks auction: So far, 29 non-coal blocks have been put up for auction in five states, namely, Andhra Pradesh, Karnataka, Jharkhand, Madhya Pradesh and Rajasthan. Of these 29 blocks, 16 were awarded in October 2016, of which eight were of iron ore, six of limestone, and one each of gold and diamond.

Projects cleared by the technical committee of  the NMET: The technical committee of the National Mineral Exploration Trust (NMET), in its meeting held in April 2016, cleared 13 projects worth Rs 282 million in various states, including Chhattisgarh, Karnataka, Madhya Pradesh, Maharashtra and Odisha. These projects pertain to minerals such as iron ore, manganese ore, limestone, bauxite and gold.

Forestry clearance for mining leases: The Ministry of Environment, Forest and Climate Change plans to grant forestry clearances for 69 mining leases for which letters of intent were issued before the MMDR Amendment Act, 2015 came into effect. Approvals for these mining leases have been delayed for several years and the forestry clearances will enable various stalled steel and cement projects to proceed.

Setting up OMECL: To boost industrial and mining activities in Odisha, the state government is in the process of setting up Odisha Mineral Exploration Corporation Limited (OMECL) which will be responsible for undertaking scientific mineral exploration to ascertain the mineralised/ore bearing area of the state to at least the G2 level of the United Nations Framework Classification to facilitate the auction of mineral blocks.

OMECL will also undertake other exploration activities including remote sensing studies, geological mapping, geophysical investigation, core logging, preservation and recording of basic data, sampling and analysis, data interpretation and correlation, 3D modelling, preparation of plans and sections, and reserves/resource estimation, among others. The corporation will be set up as a wholly owned subsidiary of Odisha Mineral Corporation Limited.

Other key initiatives

India considering mining projects in Russia: During the fifth meeting of the India-Russia Working Group on Modernisation and Industrial Cooperation, the Indian government offered to jointly develop coalfields and iron ore mines in Russia. The Russian government has agreed to exchange information on areas that have the potential for such cooperation.

Development of Vision Document 2030: As part of the government’s attempt to increase mineral production in the country, NITI Aayog has directed the Ministry of Mines to prepare a vision document outlining the strategy for the sector till 2030.

Independent regulator for mining sector: In October 2016, NITI Aayog favoured the creation of an independent regulator for the mining sector in a bid to make it more profitable.


The mining sector is undoubtedly indispensable for economic growth in the country, and there exists a huge market for mining output. While the introduction of new policies and amendments to the existing policy framework bode well for the sector, the implementation of these measures will be key. Supply-side problems will also need special attention, both from a policy and project execution standpoint. Further, current issues impacting the sector will need to be resolved; only then will planned investments materialise and effective technology and equipment utilisation be achieved.