New Delhi: Higher prison term and hefty penalty of 5 lakh, 20 times higher than the existing fine for violating terms of mineral excavations are among the proposals contained in the draft Bill to amend the 57-year old Act governing India’s mineral sector.

The proposed Mines and Minerals (Development and Regulation) (Amendment) Bill, 2014, which is silent on 26% profit sharing clause by the mining companies with the project affected people in the lapsed MMDR Bill, also seeks to make illegal mining of notified minerals as a cognisable offence.

“Provided that where the contravention of the provisions of sub-section (1) or sub-section (1A) of Section 4 is in relation to a notified mineral, punishment shall be imprisonment for a term which may extend to five years or with fine which may extend to five lakh rupees or with both," the Draft Bill says.

The existing provisions provides for “imprisonment for a term which may extend to two years, or with fine which may extend to twenty-five thousand rupees, or with both" for violations of norms, illegal mining, trespassing etc.

“In the case of a continuing contravention, with additional fine which may extend to 50,000 for every day during which such contravention continues after conviction for the first such contravention."

The Amendment Bill also seeks to make the offence of illegal mining in respect to notified minerals a cognisable offence.

The purpose of the new Bill is to make the concession regime more investor-friendly by simplifying procedures as the new Bill that seeks to bring comprehensive amendments to the MMDR Act 1957, proposes to increase efficiency by allowing transfer of reconnaissance and prospecting licences and associated data without restrictions.

Aimed at improving transparency in allocation of mineral resources, government seeks to amend the existing Act to introduce competitive bidding through the auction route for iron ore and other minerals.

“In order to both improve transparency in allocation as well as to ensure a fair share of the value of minerals for the government, the Bill prescribes competitive bidding by auction as the method to be followed for allocation of Mining Leases (MLs) in respect of notified minerals," said a draft copy of the Bill posted in Mines Ministry’s website.

It proposes that there is no need for reconnaissance permits or prospecting licences issued for such minerals.

Seeking comments from stakeholders, the Ministry in the proposed Bill has said the route has been proposed in line with recommendations of the Hoda Committee on National Mineral Policy.

The bill, if passed in Parliament, would amend the 1957 Act under the same name. The earlier Bill had lapsed. “Bulk minerals such as iron ore, limestone, manganese, bauxite etc., which are proposed to be notified, will account for 85% or more of the value of mineral production in India," the Mines Ministry said. As far as non-notified minerals are concerned, the Bill seeks to grant a combined PL-cum-ML for these minerals through a competitive bidding process.

“The scheme envisages that the successful bidder will conduct the exploration and prospecting work at his own risk and cost. In case there is any find, he will have to abide by the bid conditions which could be in the form of a production share, or a payment linked to the royalty payable etc," it said.

Though mining is a state subject, the new Bill seeks to empower Centre to prescribe different Terms and Conditions for auctions of different types of minerals and their application to different states.

The new Bill, it said, will also have focus on attracting private investment and latest technology and eliminating delay in administration, so as to enable expeditious and optimum development of mineral resources of the country.

To empower states to tackle the nagging illegal mining issue, the proposed Bill has also a provision to enable State Governments to set up special courts for trial of offences under the Act, if felt necessary.

In order to earmark funds for benefit of persons affected by mining as also for the rebuilding of infrastructure in the mining affected areas, the Bill proposes to set up a District Mineral Foundation in every district affected by mining.

“This will be funded by an additional levy related to royalty, the rate of which will be prescribed by the Central Government," the Mines Ministry proposed.

Stating that country’s mineral endowment is characterised by presence of bulk, ‘surficial´ minerals as well as deep-seated and difficult-to-access minerals, it said the regulatory regime necessary to promote the optimum and efficient exploitation of these two categories of minerals needs different mechanisms.

“The existing Act does not distinguish between these two categories and adopts a uniform approach, which has given rise to problems.

The Amendment Bill seeks to differentiate between these two categories and prescribe different procedures for the same," the Ministry said, outlining the objectives that the new Bill seeks to achieve. Maximum area limit for prospecting licences and mining leases, as presently provided in the Act, has been found to be inadequate in several cases, the ministry said. “The Amendment Bill now seeks to increase the maximum areas permitted for prospecting licences and mining leases up to the extent specified in the lapsed MMDR Bill, 2011," it said. PTI

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