INDIA Law and Practice Contributed by: Vishnu Sudarsan, Kartikeya Gajjala and Mehar Vasant, J Sagar Associates
1.6 Granting of Mineral Rights State governments are the granting authority for mineral concessions; please see 1.5 Nature of Mineral Rights . Notably, by way of amendments to the MMDR Act, the central government has been empow - ered to conduct the auction of mineral conces - sions in certain circumstances – namely, where the state government fails to complete the auc - tion or re-auction of a mineral block within the stipulated timeframe. The central government is also empowered by way of a 2023 amendment to the MMDR Act to exclusively undertake auc - tions for certain “critical minerals”, such as lith - ium, cobalt, nickel-bearing minerals, etc. Nev - ertheless, even in such instances, the eventual grantor of the mineral concession continues to be the state government, so there is no overlap in jurisdiction. 1.7 Mining: Security of Tenure Term for Mineral Concessions With effect from the 2015 amendments to the MMDR Act, all mining leases are granted for a period of 50 years; the amendment also extend - ed the term of pre-2015 mining leases to 50 years. There is, however, no allowance for the renewal or extension of such a term. Blocks in respect of which the mining leases have expired are put up for re-auction. With regard to composite licences, which govern prospecting operations pursuant to a prosect - ing licence before the commencement of mining operations under a mining lease, the MMDR Act states that prospecting licences may be granted for a maximum period of three years. A pros - pecting licence may be renewed for a period not exceeding two years if the state govern - ment is satisfied that a longer period is required
mineral concessions), while the state govern - ment is ordinarily responsible for conducting the process of granting mineral concessions, and for the granting thereof. Thus, the role of the state is that of grantor-regulator, with the central govern - ment being the regulator and the state govern - ment being the grantor. There is no mandate for national or government joint venture, contracting or participation. The MMDR Act stipulates that any Indian national or company that satisfies such conditions as may be prescribed is eligible for the granting of a mineral concession. However, the law does empower the central government or state gov - ernment to reserve any area (that is not already held under any prospecting licence or mining lease) for undertaking prospecting or mining operations through a government company or corporation owned or controlled by the central or state government, as the case may be. If such company or corporation proposes to carry out the operations in a joint venture with other per - sons, the joint venture partner is required to be selected through a competitive process, and such company or corporation must hold more than 74% of the paid-up share capital in such joint venture. Such reservation, however, lapses if such operations are not commenced within five years from the date of the reservation. 1.5 Nature of Mineral Rights Please see 1.2 Legal System and Sources of Mining Law and 1.3 Ownership of Min- eral Resources . Mineral rights are granted by the state governments pursuant to law (ie, the MMDR Act), by way of a mining lease, which permits the lessee to undertake mining opera - tions. Mining leases may be transferred by their holder to another person, subject to obtaining requisite approval from the state government in this regard.
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