INDIA Law and Practice Contributed by: Vishnu Sudarsan, Kartikeya Gajjala and Mehar Vasant, J Sagar Associates
to enable the licensee to complete prospecting operations. Progress From Exploration to Mining The MMDR Act originally contemplated a vest - ed right to obtain a mining lease after complet - ing prospecting operations (and a prospecting licence followed by a mining lease after com - pleting reconnaissance operations). However, these rights were brought to an end by way of an amendment to the MMDR Act in 2015, although pre-existing rights were grandfathered. Subse - quently, even grandfathered rights were entirely extinguished by way of another amendment to the MMDR Act in 2021. Notably, these amend - ments are pending challenge before the writ courts. Nevertheless, as noted above, the law recog - nises the concept of a “composite licence”, whereby a prospecting licence is first granted for undertaking prospecting operations (ie, opera - tions undertaken for the purpose of exploring, locating or proving mineral deposit) and, upon the successful and satisfactory completion of such prospecting operations, the licensee is granted a mining lease for undertaking mining operations. Maintenance Requirements and Operating Control Pursuant to rules notified under the MMDR Act, the central government has prescribed various conditions for undertaking mining operations, including an obligation to carry out mining oper - ations in a proper, skilful and workman-like man - ner, and in such a manner so as to ensure the systematic development of mineral deposits, the conservation of minerals and the protection of the environment. In this regard, it is notable that the NMP envisages the promotion of zero-waste mining, the prevention of sub-optimal and unsci -
entific mining, and the conservation of minerals oriented towards the augmentation of reserve/ resource base. Cancellation Procedures The rules notified under the MMDR Act empower the state government to terminate a mining lease to the extent that the mining lessee is in breach of certain obligations thereunder, such as fail - ing to permit the state government to carry out inspections or failing to make payment of statu - tory dues. In addition, the state government may – either of its own accord or upon the request of the central government, and subject to giving the mineral concession holder an opportunity to be heard – prematurely terminate a prospecting licence or mining lease in the interest of: • the regulation of mines and mineral develop - ment; • the preservation of the natural environment; • the control of floods; • the prevention of pollution or avoiding danger to public health or communications; or • ensuring the safety of buildings, monuments or other structures, or for such other purpos - es as may be deemed appropriate. The MMDR Act also stipulates that a mining lease will lapse if a mining lessee fails to under - take production and dispatch for a period of two years after the date of execution of the lease or, having commenced production and dispatch, discontinues the same for a period of two years. Notably, in Common Cause v Union of India, reported as (2016) 11 SCC 455, the Supreme Court of India held that such lapsing of a mining lease is not automatic – the lease is not deemed to have lapsed until the state government pass -
232 CHAMBERS.COM
Powered by FlippingBook