Government plans to replace 1957 mining law with comprehensive new legislation

The government is considering a comprehensive overhaul of the Mines and Minerals (Development and Regulation) Act, 1957, to introduce a new mining law aimed at improving ease of doing business and ease of living in the country, according to news agency PTI, citing sources.

The Ministry of Mines administers the existing legislation, which serves as the principal central law governing the development and regulation of mines and minerals in India. The Act has been amended several times to address the evolving needs of the mining and minerals sector.

The proposed overhaul comes as the Centre seeks to simplify regulatory frameworks across sectors and improve the business environment. The mining sector is considered important for economic growth, technological progress, meeting the country's strategic requirements and achieving the government's vision of Viksit Bharat by 2047.

According to sources cited by PTI, an inter-ministerial committee chaired by the additional secretary in the Ministry of Mines will prepare the draft of the proposed legislation.

It will also consider emerging trends and future requirements in the mining sector while drafting the proposed legislation.

One of the key objectives will be to simplify the language of the existing law to make its provisions easier to understand and implement. The committee will also examine how the legislation can be aligned with related laws and constitutional requirements.

The panel has been tasked with recommending structural and substantive reforms to improve legal clarity, enforceability and administrative efficiency.

These changes are intended to create a more streamlined regulatory framework for the mining industry while addressing the sector's changing requirements.

The consultation process is expected to help the government assess existing regulatory challenges and identify provisions that may require modification, simplification or replacement.

The proposed exercise would cover the law's broader structure as well as its substantive provisions, rather than being limited to amendments to individual sections.

However, the government is currently considering the overhaul, and the proposed new legislation will need to progress through the drafting and legislative processes before becoming law.

What the existing MMDR Act governs

The MMDR Act, 1957, provides the central legal framework for regulating mining and mineral development in India. It empowers the Centre to regulate mineral development in the public interest and establish rules for the conservation and systematic development of mineral resources.

The legislation distinguishes between major and minor minerals. The Centre has a key role in regulating major minerals, while state governments have powers over minor minerals under the applicable legal framework.

State governments grant mineral concessions, including prospecting licences and mining leases, subject to the provisions of the central law and applicable rules. These concessions govern the rights and conditions under which companies and other entities can explore for and extract minerals.

The Act also provides the framework for auctioning mineral concessions and determining applicable regulatory requirements. The central government fixes royalty rates for minerals, while state governments collect royalties from leaseholders.

Focus on long-term mining sector requirements

The proposed overhaul signals an effort to create a more comprehensive legal framework for the mining industry, taking into account economic priorities, technological developments and the country's strategic mineral needs.

The extent of the proposed changes will become clearer as the committee reviews the existing provisions, consults stakeholders and prepares the draft legislation.