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The Mines and Minerals (Development and Regulation) Amendment Bill, 2021

SECTION Section 1

Untitled Section

1
THE MINES AND MINERALS (DEVELOPMENT AND REGULATION)
AMENDMENT BILL, 2021
A
BILL
further to amend the Mines and Minerals (Development and Regulation) Act, 1957.
BE it enacted by Parliament in the Seventy-second Year of the Republic of India as
follows:—
SECTION Section 10

Untitled Section

9.For section 8B of the principal Act, the following section shall be substituted,
namely:—
“8B. (1) Notwithstanding anything contained in this Act or any other law for the
time being in force, all valid rights, approvals, clearances, licences and the like granted
to a lessee in respect of a mine (other than those granted under the provisions of the
Atomic Energy Act, 1962 and the rules made thereunder) shall continue to be valid
even after expiry or termination of lease and such rights, approvals, clearances,
licences and the like shall be transferred to, and vested; subject to the conditions
provided under such laws; in the successful bidder of the mining lease selected through
auction under this Act:
Provided that where on the expiry of such lease period, mining lease has not
been executed pursuant to an auction under provisions of sub-section ( 4) of
SECTION Section 11

Untitled Section

section 8A, or lease executed pursuant to such auction has been terminated within a
period of one year from such auction, the State Government may, with the previous
approval of the Central Government, grant lease to a Government company or
corporation for a period not exceeding ten years or till selection of new lessee through
auction, whichever is earlier and such Government company or corporation shall be
deemed to have acquired all valid rights, approvals, clearances, licences and the like
vested with the previous lessee:
Amendment
of section 8A.
10 of 2015.
Substitution of
new section for
SECTION Section 12

Untitled Section

section 8B.
Provisions for
period and
transfer of
statutory
clearances.33 of 1962.
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Provided further that the provisions of sub-section ( 1) of section 6 shall not
apply where such mining lease is granted to a Government company or corporation
under the first proviso:
Provided also that in case of atomic minerals having grade equal to or above the
threshold value, all valid rights, approvals, clearances, licences and the like in respect
of expired or terminated mining leases shall be deemed to have been transferred to, and
vested in the Government company or corporation that has been subsequently granted
the mining lease for the said mine.
(2)Notwithstanding anything contained in any other law for the time being in
force, it shall be lawful for the new lessee to continue mining operations on the land till
expiry or termination of mining lease granted to it, in which mining operations were
being carried out by the previous lessee.”.
SECTION Section 13

Untitled Section

10.In section 9B of the principal Act,—
(i)after sub-section (3), the following proviso shall be inserted, namely:—
“Provided that the Central Government may give directions regarding
composition and utilisation of fund by the District Mineral Foundation.”;
(ii) in sub-section (5), after the words and figures, “Amendment Act, 2015”, the
words, brackets, figures and letter “, other than those covered under the provisions of
sub-section (2) of section 10A” shall be inserted;
(iii) in sub-section (6), after the words and figures, “Amendment Act, 2015”, the
words, brackets, figures and letter “and those covered under the provisions of
sub-section (2) of section 10A” shall be inserted.
SECTION Section 14

Untitled Section

11.In section 9C of the principal Act,—
(i)in sub-section ( 1), for the words “non-profit body”, the words “non-profit
autonomous body” shall be substituted;
(ii) after sub-section (4), the following sub-section shall be inserted, namely:—
“(5) The entities specified and notified under sub-section (1) of section 4
shall be eligible for funding under the National Mineral Exploration Trust.”.
SECTION Section 15

Untitled Section

12.In section 10 of the principal Act, after sub-section (3), the following sub-section
shall be inserted, namely:—
“(4) Notwithstanding anything contained in this section, no person shall be
eligible to make an application under this section unless-—
(a)he has been selected in accordance with the procedure specified under
sections 10B, 11, 11A or the rules made under section 11B;
(b)he has been selected under the Coal Mines (Special) Provisions
Act, 2015; or
(c)an area has been reserved in his favour under section 17A.”.
SECTION Section 16

Untitled Section

13.In section 10A of the principal Act, in sub-section (2),—
(i)in clause (b), the following provisos shall be inserted, namely:—
“Provided that for the cases covered under this clause including the
pending cases, the right to obtain a prospecting licence followed by a mining
lease or a mining lease, as the case may be, shall lapse on the date of
commencement of the Mines and Minerals (Development and Regulation)
Amendment Act, 2021:
Provided further that the holder of a reconnaissance permit or prospecting
licence whose rights lapsed under the first proviso, shall be reimbursed the
Amendment
of section 9B.
Amendment
of section 9C.
Amendment
of section 10.
11 of 2015.
Amendment of
SECTION Section 17

Untitled Section

section 10A.
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expenditure incurred towards reconnaissance or prospecting operations in such
manner as may be prescribed by the Central Government.”;
(ii) after clause (c), the following clause shall be inserted, namely:—
“(d) in cases where right to obtain licence or lease has lapsed under,
SECTION Section 18

Untitled Section

clauses (b) and (c), such areas shall be put up for auction as per the provisions
of this Act:
Provided that in respect of the minerals specified in Part B of the First
Schedule where the grade of atomic mineral is equal to or greater than the threshold
value, the mineral concession for such areas shall be granted in accordance with
the rules made under section 11B.”.
SECTION Section 19

Untitled Section

14.In section 10B of the principal Act,—
(i)for sub-section (1), the following sub-section shall be substituted, namely:—
“(1) The provisions of this section shall not apply to the,—
(a)cases falling under section 17A;
(b)minerals specified in Part A of the First Schedule;
(c)minerals specified in Part B of the First Schedule where the grade
of atomic mineral is equal to or greater than such threshold value as may
be notified by the Central Government from time to time; or
(d)land in respect of which the minerals do not vest in the
Government.”;
(ii) in sub-section (3), the following proviso shall be inserted, namely:—
“Provided that where the State Government has not notified such area for
grant of mining lease after establishment of existence of mineral contents of any
mineral (whether notified mineral or otherwise), the Central Government may
require the State Government to notify such area within a period to be fixed in
consultation with the State Government and in cases where the notification is
not issued within such period, the Central Government may notify such area for
grant of mining lease after the expiry of the period so specified.”;
(iii) in sub-section (4), the following provisos shall be inserted, namely:—
“Provided that-—
(a)where the State Government has not successfully completed
auction for the purpose of granting a mining lease in respect of any mineral
(whether notified mineral or otherwise) in such notified area; or
(b)upon completion of such auction, the mining lease or letter of
intent for grant of mining lease has been terminated or lapsed for any
reason whatsoever,
the Central Government may require the State Government to conduct and
complete the auction or re-auction process, as the case may be, within a period
to be fixed in consultation with the State Government and in cases where such
auction or re-auction process is not completed within such period, the Central
Government may conduct auction for grant of mining lease for such area after
the expiry of the period so specified:
Provided further that upon successful completion of the auction, the Central
Government shall intimate the details of the preferred bidder in the auction to the
State Government and the State Government shall grant mining lease for such
area to such preferred bidder in such manner as may be prescribed by the Central
Government.”;
Amendment of
SECTION Section 2

Untitled Section

1.(1) This Act may be called the Mines and Minerals (Development and Regulation)
Amendment Act, 2021.
(2)It shall come into force on such date as the Central Government may, by notification
in the Official Gazette, appoint; and different dates may be appointed for different provisions
of this Act and any reference in any such provision to the commencement of this Act shall be
construed as a reference to the coming into force of that provision.
SECTION Section 20

Untitled Section

section 10B.
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(iv) in sub-section (6), for the proviso, the following proviso shall be substituted,
namely:—
“Provided that no mine shall be reserved for captive purpose in the
auction.”.
SECTION Section 21

Untitled Section

15.Section 10C of the principal Act shall be omitted.
SECTION Section 22

Untitled Section

16.In section 11 of the principal Act,—
(i)for sub-section (1), the following sub-section shall be substituted, namely:—
“(1) The provisions of this section shall not apply to the,-—
(a)cases falling under section 17A;
(b)minerals specified in Part A of the First Schedule;
(c)minerals specified in Part B of the First Schedule where the grade
of atomic mineral is equal to or greater than such threshold value as may
be notified by the Central Government from time to time; or
(d)land in respect of which the minerals do not vest in the
Government.”;
(ii) in sub-section (4), the following proviso shall be inserted, namely:—
“Provided that where the State Government has not notified such area for
grant of composite licence of any mineral (whether notified mineral or otherwise),
the Central Government may require the State Government to notify such area
within a period to be fixed in consultation with the State Government and in
cases where the notification is not issued within such period, the Central
Government may notify such area for grant of composite licence after the expiry
of the period so specified.”;
(iii) in sub-section (5), the following provisos shall be inserted, namely:—
“Provided that—
(a)where the State Government has not successfully completed
auction for the purpose of granting a composite licence in respect of any
mineral (whether notified mineral or otherwise) in such notified area; or
(b)upon completion of such auction, the composite licence or letter
of intent for grant of composite licence has been terminated or lapsed for
any reason whatsoever,
the Central Government may require the State Government to conduct and
complete the auction or re-auction process, as the case may be, within a period
to be fixed in consultation with the State Government and in cases where such
auction or re-auction process is not completed within such period, the Central
Government may conduct auction for grant of composite licences for such area
after the expiry of the period so specified:
Provided further that upon successful completion of the auction, the Central
Government shall intimate the details of the preferred bidder in the auction to the
State Government and the State Government shall grant composite licence for
such area to such preferred bidder in such manner as may be prescribed by the
Central Government.”;
(iv) for sub-section (10), the following sub-section shall be substituted, namely:—
“(10) On completion of the prospecting operations, the holder of the
composite licence shall submit the result of the prospecting operations in the
form of a geological report to the State Government specifying the area required
Omission of
SECTION Section 23

Untitled Section

section 10C.
Amendment
of section 11.
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for mining lease and the State Government shall grant mining lease for such area,
to the holder of the composite licence in such manner as may be prescribed by
the Central Government.’’.
SECTION Section 24

Untitled Section

17.In section 12A of the principal Act,—
(i)in sub-section (2),—
(a)for the words, figures and letter, “section 10B or section 11”, the words,
“this Act” shall be substituted;
(b)the following proviso shall be inserted, namely:-—
“Provided that the transferee of mining lease shall not be required
to pay the amount or transfer charges referred to in sub-section (6), as it
stood prior to the commencement of the Mines and Minerals (Development
and Regulation) Amendment Act, 2021, after such commencement but no
refund shall be made of the charges already paid.”;
(iii) sub-section (6) shall be omitted.
SECTION Section 25

Untitled Section

18.In section 13 of the principal Act,—
( a) in sub-section ( 1), for the words “reconnaissance permits, prospecting
licences and mining leases”, the words “mineral concession” shall be substituted;
(b)in sub-section (2),—
(i)the clauses (qqh) and (qqk) shall be omitted;
(ii) for clause (r), the following clauses shall be substituted, namely:-—
“(r) the period of mining lease under sub-section (4) of section 8;
(s)the manner of sale of mineral by the holder of a mining lease
under sub-section (5) of section 8;
(t)the manner of sale of mineral under sub-section (7A) of section 8A;
(u)the manner for reimbursement of expenditure towards
reconnaissance permits or prospecting operations under second proviso
to clause (b) of sub-section (2) of section 10A;
(v)the manner of granting mining lease to the preferred bidder under
the second proviso to sub-section (4) of section 10B;
(w)the manner of granting composite licence to the preferred bidder
under the second proviso to sub-section ( 5) of section 11;
(x)the manner of granting mining lease by the State Government to
the holder of the composite licence under sub-section (10
) of section 11;
(y)any other matter which is to be, or may be prescribed, under this
Act.”.
SECTION Section 26

Untitled Section

19.In section 17A of the principal Act,—
(a)for sub-section (2A), the following shall be substituted, namely:—
“(2A) Where in exercise of the powers conferred by sub-section ( 1A) or
sub-section (2), the Central Government or the State Government, as the case
may be, reserves any area for undertaking prospecting or mining operations or
prospecting operations followed by mining operations, the State Government
shall grant prospecting licence, mining lease or composite licence, as the case
may be, in respect of such area to such Government company or corporation
within the period specified in this section:
Amendment
of section
12A.
Amendment
of section 13.
Amendment of
SECTION Section 27

Untitled Section

section 17A.
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Provided that in respect of any mineral specified in Part B of the First
Schedule, the State Government shall grant the prospecting licence, mining
lease or composite licence, as the case may be, only after obtaining the previous
approval of the Central Government.”;
(b)in sub-section (2C),—
(i)for the words, “may be prescribed by the Central Government.”, the
words “specified in the Fifth Schedule” shall be substituted;
(ii) the following shall be inserted, namely:—
“Provided that the Central Government may, by notification in the
Official Gazette and for reasons to be recorded in writing, amend the Fifth
Schedule so as to modify the entries mentioned therein in the said Schedule
with effect from such date as may be specified in the said notification.
Explanation.—For the removal of doubts, it is hereby clarified that
all such Government companies or corporations whose mining lease has
been extended after the commencement of the Mines and Minerals
(Development and Regulation) Amendment Act, 2015, shall also pay such
additional amount as specified in the Fifth Schedule for the mineral produced
after the commencement of the Mines and Minerals (Development and
Regulation) Amendment Act, 2021.”
(c)after sub-section (3), the following sub-sections shall be inserted, namely:—
“(4) The reservation made under this section shall lapse in case no mining
lease is granted within a period of five years from the date of such reservation:
Provided that where the period of five years from the date of reservation
has expired before the date of commencement of the Mines and Minerals
(Development and Regulation) Amendment Act, 2021 or expires within a period
of one year from the date of commencement of the said Act, the reservation shall
lapse in case no mining lease is granted within a period of one year from the date
of commencement of the said Act:
Provided further that the State Government may, on application made by
such Government company or corporation or on its own motion, and on being
satisfied that it shall not be possible to grant the mining lease within the said
period, make an order with reasons in writing, within a period of three months
from the date of receipt of such application, to relax such period by a further
period not exceeding one year:
Provided also that where the Government company or corporation in whose
favour an area has been reserved under this section before the commencement
of the Mines and Minerals (Development and Regulation) Amendment
Act, 2015, has commenced production from the reserved area without execution
of mining lease, such Government company or corporation shall be deemed to
have become lessee of the State Government from the date of commencement of
mining operations and such deemed lease shall lapse upon execution of the
mining lease in accordance with this sub-section or expiry of period of one year
from the date of commencement of the Mines and Minerals (Development and
Regulation) Amendment Act, 2021, whichever is earlier.
(5)The termination or lapse of mining lease shall result in the lapse of the
reservation under this section.”.
10 of 2015.
10 of 2015.
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SECTION Section 28

Untitled Section

20.In section 21 of the principal Act, after sub-section (6), the following Explanation
shall be inserted, namely:—
“Explanation.—On and from the date of commencement of the Mines and
Minerals (Development and Regulation) Amendment Act, 2021, the expression “raising,
transporting or causing to raise or transport any mineral without any lawful authority”
occurring in this section, shall mean raising, transporting or causing to raise or transport
any mineral by a person without prospecting licence, mining lease or composite licence
or in contravention of the rules made under section 23C.”.
SECTION Section 29

Untitled Section

21.After the Fourth Schedule to the principal Act, the following Schedules shall be
inserted, namely:—
“THE FIFTH SCHEDULE
[See sections 8(4), 8A(8) and 17A(2C)]
S.No. Mineral Additional amount on grant or extension of mining lease
SECTION Section 3

Untitled Section

2.Throughout the Mines and Minerals (Development and Regulation) Act, 1957
(hereinafter referred to as the principal Act),-—
(i)for the words “reconnaissance permit, prospecting license or mining lease”
wherever they occur, the words “mineral concession” shall be substituted;
Short title and
commencement.
Substitution of
references to
certain
expressions by
certain other
expressions.
67 of 1957.
AS INTRODUCED IN LOK SABHA
Bill No. 65 of 2021
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(ii) for the words “prospecting licence-cum-mining lease”, wherever they occur
[other than in clause (a) of section 3], the words “composite licence” shall be substituted.
SECTION Section 30

Untitled Section

1.Iron ore and chromite Equivalent to one hundred and fifty per cent. of the
royalty payable
SECTION Section 31

Untitled Section

2.Copper Equivalent to fifty per cent. of the royalty payable
SECTION Section 32

Untitled Section

3.Coal and lignite Equivalent to the royalty payable
SECTION Section 33

Untitled Section

4.Other minerals (other Equivalent to the royalty payable
than coal and lignite)
Explanation.—For the purposes of this Schedule, the additional amount shall be in
addition to royalty or payment to the District Mineral Foundation and National Mineral
Exploration Trust or any other statutory payment.
THE SIXTH SCHEDULE
[See sections 8(5) and 8A(7A)]
(i)For non-auctioned captive mines (other than coal and lignite):
S.No. Mineral Additional Amount
SECTION Section 34

Untitled Section

1.Bauxite
(i)Metallurgical Grade Equivalent to one hundred and fifty per cent.
of the royalty payable
(ii) Non Metallurgical Grade Equivalent to the royalty payable
SECTION Section 35

Untitled Section

2.Chromite
(i)Up to forty per cent. of Cr2O3 Equivalent to the royalty payable
(ii) forty per cent. and more of Equivalent to two hundred per cent. of the
Cr2O3 and concentrates royalty payable
SECTION Section 36

Untitled Section

3.Iron ore
(i)Lumps, ROM and concentrates Equivalent to two hundred and fifty per cent.
of the royalty payable
(ii) Fines Equivalent to one hundred and fifty per cent.
of the royalty payable
SECTION Section 37

Untitled Section

4.Limestone
(i)L.D. Grade (less than 1.5 per cent. Equivalent to two hundred per cent. of the
silica content) royalty payable
(ii) Other grades Equivalent to the royalty payable
Amendment
of section 21.
Amendment
of Schedules.
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SECTION Section 38

Untitled Section

5.Manganese
(i)Less than thirty-five per cent. Equivalent to the royalty payable
of manganese content
(ii) Thirty-five per cent. and above Equivalent to five hundred per cent. of the
of manganese content royalty payable
SECTION Section 39

Untitled Section

6.Other minerals Equivalent to the royalty payable
(ii) For auctioned captive mines (other than coal and lignite):
S.No. Quantity of sale Additional Amount
SECTION Section 4

Untitled Section

3.In section 3 of the principal Act,-—
(i)for clauses (a) and (aa), the following clauses shall be substituted, namely:—
‘(a) “composite licence” means the prospecting licence-cum-mining lease
which is a two stage concession granted for the purpose of undertaking
prospecting operations followed by mining operations in a seamless manner;
(aa) “dispatch” means the removal of minerals or mineral products from
the leased area and includes the consumption of minerals and mineral products
within such leased area;
(ab) “Government company” shall have the same meaning as assigned to
it in clause (45) of section 2 of the Companies Act, 2013;
(ac) “leased area” means the area specified in the mining lease within
which the mining operations can be undertaken and includes the non-mineralised
area required and approved for the activities falling under the definition of “mine”
as referred to in clause (i);
(ad) “minerals” includes all minerals except mineral oils;
(ae) “mineral concession” means either a reconnaissance permit,
prospecting licence, mining lease, composite licence or a combination of any of
these and the expression “concession” shall be construed accordingly;’;
(ii) after clause (f), the following clause shall be inserted, namely:-—
‘(fa) “production” or any derivative of the word “production” means the
winning or raising of mineral within the leased area for the purpose of processing
or dispatch;’;
(iii) after clause (hb), the following clause shall be inserted, namely:—
‘(hba) “Schedule” means the Schedules appended to the Act;’;
(iv) in clause (i),—
(i)for the words and figures, “the Mines Act, 1952”, the words and
figures “the Occupational Safety, Health and Working Conditions Code,
2020” shall be substituted;
(ii) the following Explanation shall be inserted, namely:-—
“Explanation.—For the purposes of this clause,—
(i)a mine continues to be a mine till exhaustion of its mineable
mineral reserve and a mine may have different owners during different
times from the grant of first mining lease till exhaustion of such mineable
mineral reserve;
(ii) the expression "mineral reserve" means the economically mineable
part of a measured and indicated mineral resource.".
SECTION Section 40

Untitled Section

1.Sale of mineral up to twenty-five Nil
per cent. of annual production
SECTION Section 41

Untitled Section

2.Sale of mineral more than Equivalent to fifty per cent. of the royalty
twenty-five per cent. and up to payable
fifty per cent. of annual production
(iii) For coal and lignite:
S.No. T ype of mine Additional Amount
SECTION Section 42

Untitled Section

1.( i) Captive coal and lignite mines, Equivalent to two hundred per cent. of the
auctioned for power sector royalty payable
through reverse bidding under the
Coal Mines (Special Provisions)
Act, 2015 (11 of 2015)
(ii) Captive Coal and lignite mines Equivalent to the royalty payable
allocated through auction route
(other than mines covered under
item no. (iv))
(iii) Captive Coal and lignite mines Equivalent to the royalty payable
allocated through allotment route
(other than mines covered under
item nos. (i) and (iv))
(iv) For captive coal and lignite
mines that were auctioned and
allotted with condition allowing
sale of coal up to twenty-five
per cent. of annual production—
(a)for sale of coal up to Additional amount payable as per the
twenty-five per cent. condition mentioned in the tender document
of annual production or allotment document
(b)for sale of coal more Fifty per cent. of the royalty payable
than twenty-five per cent.
and up to fifty per cent. of
annual production
Explanation.—For the purposes of this Schedule, it is hereby clarified that—
(i)the additional amount shall be in addition to royalty or payment to the District
Mineral Foundation and National Mineral Exploration Trust or any other statutory
payment or payment specified in the tender document or the auction premium (wherever
applicable).
(ii) Ad valorem royalty for the purpose of calculating the additional amount for
coal and lignite shall be based on National Coal Index and Representative Price of coal
excluding the taxes, levies and other charges.”.
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STATEMENT OF OBJECTS AND REASONS
The Mines and Minerals (Development and Regulation) Act, 1957 (the Act) was enacted
with a view to provide for the development and regulation of mines and minerals under the
control of Union.
SECTION Section 43

Untitled Section

2.The Act was comprehensively amended in 2015 to bring several reforms in the
mineral sector, notably, mandating auction of mineral concessions to improve transparency,
establishing District Mineral Foundation and National Mineral Exploration Trust and stringent
penalty for illegal mining. The Act was further amended in the years 2016 and 2020 to allow
transfer of leases for non-auctioned captive mines and to deal with the emergent issue of
expiry of leases on 31st March 2020.
SECTION Section 44

Untitled Section

3.In order to fully harness the potential of the mineral sector, increase employment
and investment in the mining sector including coal, increase the revenue to the States,
increase the production and time bound operationalisation of mines, maintain continuity in
mining operations after change of lessee, increase the pace of exploration and auction of
mineral resources and resolve long pending issues that have slowed the growth of the
sector, it is felt necessary to further amend the said Act.
SECTION Section 45

Untitled Section

4.The Mines and Minerals (Development and Regulation) Amendment Bill, 2021,
inter alia, provides for the following, namely:—
(i)to remove the distinction between captive and merchant mines by providing
for auction of mines in future without restriction of captive use of minerals and allowing
existing captive mines including captive coal mines to sell up to fifty per cent. of the
minerals produced after meeting the requirement of linked end use plants to ensure
optimal mining of mineral resources and specify the additional amount to be charged
on such sale. The sale of minerals by captive plants would facilitate increase in
production and supply of minerals, ensure economies of scale in mineral production,
stabilize prices of ore in the market and bring additional revenue to the States;
(ii) to provide for payment of additional amount to the State Government on
extension and grant of mining lease of Government companies to create level playing
field between the auctioned mines and the mines of Government companies;
(iii) to provide that all the valid rights, approvals, clearances, licences and the
like granted to a lessee in respect of a mine shall continue to be valid even after expiry
or termination of lease and such clearances shall be transferred and vested to the
successful bidder of the mining lease. This will ensure continuity in mining operations
even with change of lessee, conservation of mineral and avoid repetitive and redundant
process of obtaining clearances again for the same mine;
(iv) to grant short term mining lease to Government companies in situations
where the auction of mines pursuant to sub-section (4) of section 8A has failed;
(v)to empower the Central Government to issue directions regarding composition
and utilisation of Fund by the District Mineral Foundation;
(vi) to close the pending cases of non-auctioned concession holders which
have not resulted in grant of mining leases despite passage of a considerable time of
more than five years. The existence of these cases is anachronistic and antagonistic to
the auction regime. The closure of the pending cases would facilitate the Government
to put to auction a large number of mineral blocks in the interest of nation resulting in
early operationalisation of such blocks and additional revenue to the State
Governments;
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(vii) to remove the restrictions on transfer of mineral concessions for
non-auctioned mines to attract fresh investment and new technology in the sector;
(viii) to empower the Central Government to notify the area and conduct auction
in cases where the State Governments face difficulty in notifying the areas and
conducting auction or fails to notify the area or conduct auction in order to ensure
auction of more number of mineral blocks on regular basis for continuous supply of
minerals in the country;
(ix) to fix a time-frame for grant of leases for the areas reserved for Government
companies for expediting grant of leases and production by the Government companies;
and
(x)to amend section 21 of the Act so as to clarify the expression "without any
lawful authority" in order to limit its scope to the violations of the said Act and the
rules made thereunder. The said amendment will bring clarity and certainty to the
mining sector.
SECTION Section 46

Untitled Section

5.The Bill seeks to achieve the above objectives.
N
EW DELHI; PRALHAD JOSHI.
The 10th March, 2021.
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FINANCIAL MEMORANDUM
The Bill seeks to amend the Mines and Minerals (Development and Regulation) Act,
1957 (the Act) to develop the mining sector to its full potential for faster economic growth.
SECTION Section 47

Untitled Section

2.Clause 12 of the Bill proposes to insert two provisos in clause (b) of sub-section (2)
of section 10A of the said Act. The first proviso provides that upon commencement of the
Mines and Minerals (Development and Regulation) Amendment Act, 2021, the rights of
concession holders under clause (b) of sub-section (2) of section 10A to obtain a prospecting
licence followed by a mining lease or a mining lease, as the case may be, shall lapse. The
second proviso provides that the holder of a reconnaissance permit or prospecting licence
whose right has lapsed under the proposed first proviso shall be reimbursed for expenditure
incurred towards reconnaissance permit or prospecting operations in such manner as may
be prescribed by the Central Government.
SECTION Section 48

Untitled Section

3.The financial implication of this amendment will be to the extent of payment of
reimbursement by the Central Government to the holders of a reconnaissance permit or
prospecting licence whose rights have lapsed. This expenditure on account of reimbursement
may increase in case any foreign investor invokes Bilateral Investment Promotion and
Protection Agreements executed between India and other countries. The value of awards, if
any, of arbitration bodies under the said Agreement cannot be estimated at this stage.
SECTION Section 49

Untitled Section

4.The expenditure is to be incurred from the funds of the National Mineral Exploration
Trust established under section 9C of the Act. The said Trust is established for the purpose
of funding regional and detailed exploration of minerals. The holder of a mining lease or
composite licence is mandated to pay to the Trust, a sum equivalent to two per cent. of
royalty paid in terms of the Second Schedule of the Act. At present around six hundred crore
rupees accrues annually to the Trust and the Trust has around one thousand seven hundred
crore rupees after taking into account the projects sanctioned by the Trust. The accrual to
and expenditure from the Trust are done through Consolidated Fund of India.
SECTION Section 5

Untitled Section

4.In section 4 of the principal Act, in sub-section (1), in the second proviso, for the
words “such entity that may be notified for this purpose by the Central Government”, the
words “other entities including private entities that may be notified for this purpose, subject
to such conditions as may be specified by the Central Government” shall be substituted.
SECTION Section 50

Untitled Section

5.In case the funds accrued to the Trust are not sufficient for reimbursement, the
expenditure will be made from the Consolidated Fund of India through budgetary allocation.
All the expenditure from the Trust and Consolidated Fund of India would be of non-recurring
nature.
SECTION Section 51

Untitled Section

6.The amount of reimbursement will be recouped from successful bidders of the
mineral concession in that area and will be deposited in the Trust. However, recouping of
amount would depend on successful auction of these blocks.
15
MEMORANDUM REGARDING DELEGATED LEGISLATION
SECTION Section 52

Untitled Section

Clause 13 of the Mines and Minerals (Development and Regulation) Amendment
Bill, 2021 seeks to amend sub-section (2) of section 13 of the Mines and Minerals (Development
and Regulation) Act, 1957 to make rules for carrying out the provisions of the proposed
legislation which are as under:—
(i)the period of mining lease under sub-section (4) of section 8;
(ii) the manner of sale of mineral by the holder of a mining lease under
sub-section (5) of section 8;
(iii) the manner of sale of mineral under sub-section (7A) of section 8A;
(iv) the manner for reimbursement of expenditure towards reconnaissance permits
or prospecting operations under second proviso to clause ( b) of sub-section ( 2) of
SECTION Section 53

Untitled Section

section 10A;
(v)the manner of granting mining lease to the preferred bidder under the second
proviso to sub-section (4) of section 10B;
(vi) the manner of granting composite licence to the preferred bidder under the
second proviso to sub-section (5) of section 11; and
(vii) the manner of granting mining lease by the State Government to the holder
of the composite licence under sub-section (10) of section 11.
SECTION Section 54

Untitled Section

2.The matters in respect of which rules may be made and notifications issued are
matters of procedure and administrative detail and it is not practicable to provide for them in
the proposed legislation itself. The delegation of legislative power is, therefore, of a normal
character.
16
ANNEXURE
EXTRACTS FROM THE MINES AND MINERALS (DEVELOPMENT AND REGULATION) ACT, 1957
(67 OF 1957)
* * * * *
SECTION Section 55

Untitled Section

3.In this Act, unless the context otherwise requires,—
(a)“leased area” means the area specified in the mining lease within which
mining operations can be undertaken and includes the non-mineralised area required
and approved for the activities falling under the definition of mine as referred to in
SECTION Section 56

Untitled Section

clause (i);
(aa) “minerals” includes all minerals except mineral oils;
* * * * *
(i)the expressions, “mine” and “owner”, have the meaning assigned to them in
the Mines Act, 1952.
SECTION Section 57

Untitled Section

CHAPTER II
G
ENERAL RESTRICTIONS ON UNDERTAKING
PROSPECTING AND MINING OPERATIONS
SECTION Section 58

Untitled Section

4.(1) No person shall undertake any reconnaissance, prospecting or mining
operations in any area, except under and in accordance with the terms and conditions of a
reconnaissance permit or of a prospecting licence or, as the case may be, of a mining lease,
granted under this Act and the rules made thereunder:
Provided that nothing in this sub-section shall affect any prospecting or mining
operations undertaken in any area in accordance with terms and conditions of a prospecting
licence or mining lease granted before the commencement of this Act which is in force at
such commencement:
Provided further that nothing in this sub-section shall apply to any prospecting
operations undertaken by the Geological Survey of India, the Indian Bureau of Mines, the
Atomic Minerals Directorate for Exploration and Research of the Department of Atomic
Energy of the Central Government, the Directorates of Mining and Geology of any State
Government (by whatever name called), and the Mineral Exploration Corporation Limited a
Government company within the meaning of clause (45) of section 2 of the Companies Act,
2013, and any such entity that may be notified for this purpose by the Central Government:
* * * * *
4A.(1) * * * * *
(4)Where the holder of a mining lease fails to undertake mining operations for a period
of two years after the date of execution of the lease or having commenced mining operations,
has discontinued the same for a period of two years, the lease shall lapse on the expiry of the
period of two years from the date of execution of the lease or, as the case may be,
discontinuance of the mining operations:
Provided that the State Government may, on an application made by the holder of such
lease before it lapses and on being satisfied that it will not be possible for the holder of the
lease to undertake mining operations or to continue such operations for reasons beyond his
control, make an order, within a period of three months from the date of receiving of such
application, subject to such conditions as may be prescribed, to the effect that such lease
shall not lapse:
Definitions
Prospecting or
mining
operations to
be under
licence or
lease.
Termination
of
prospecting
licences or
mining leases.
35 of 1952.
18 of 2013.
17
Provided further that such lease shall lapse on failure to undertake mining operations
or inability to continue the same before the end of a period of six months from the date of the
order of the State Government:
Provided also that the State Government may, on an application made by the holder of
a lease submitted within a period of six months from the date of its lapse and on being
satisfied that such non-commencement or discontinuance was due to reasons beyond the
control of the holder of the lease, revive the lease within a period of three months from the
date of receiving the application from such prospective or retrospective date as it thinks fit
but not earlier than the date of lapse of the lease:
Provided also that no lease shall be revived under the third proviso for more than twice
during the entire period of the lease.
* * * * *
SECTION Section 59

Untitled Section

5.(1) A State Government shall not grant a reconnaissance permit, prospecting licence
or mining lease to any person unless such person—
* * * * *
(b)satisfies such conditions as may be prescribed:
Procided that in respect of any mineral specified in Part A and Part B of the
First Schedule, no reconnaissance permit, prospecting licence or mining lease
shall be granted except with the previous approval of the Central Government:
Provided further that the previous approval of the Central Government
shall not be required for grant of reconnaissance permit, prospecting licence or
mining lease in respect of the minerals specified in Part A of the First Schedule,
where,—
8A.(1) * * * * *
(8)Notwithstanding anything contained in this section, the period of mining leases,
including existing mining leases, of Government companies or corporations shall be such as
may be prescribed by the Central Government.
* * * * *
8B.(1) The provisions of this section shall apply to minerals, other than the minerals
specified in Part A and Part B of the First Schedule.
(2)Notwithstanding anything contained in this Act or any other law for the time being in
force, the successful bidder of mining leases expiring under the provisions of sub-sections (5)
and (6) of section 8A and selected through auction as per the procedure provided under this
Act and the rules made thereunder, shall be deemed to have acquired all valid rights, approvals,
clearances, licences and the like vested with the previous lessee for a period of two years:
Provided that subject to such conditions as may be prescribed, such new lessee shall
apply and obtain all necessary rights, approvals, clearances, licences and the like within a
period of two years from the date of grant of new lease.
(3)Notwithstanding anything contained in any other law for the time being in force, it
shall be lawful for the new lessee to continue mining operations on the land, in which mining
operations were being carried out by the previous lessee, for a period of two years from the
date of commencement of the new lease.
* * * * *
9B.(1) * * * * *
(3)The composition and functions of the District Mineral Foundation shall be such as
may be prescribed by the State Government.
* * * * *
Provisions for
transfer of
statutory
clearances.
Period of grant
of a mining
lease for
minerals other
than coal,
lignite and
atomic
minerals.
District
Mineral
Foundation.
Restrictions
on the grant
of prospecting
licences or
mining leases.
18
(5)The holder of a mining lease or a prospecting licence-cum-mining lease granted on
or after the date of commencement of the Mines and Minerals (Development and Regulation)
Amendment Act, 2015, shall, in addition to the royalty, pay to the District Mineral Foundation
of the district in which the mining operations are carried on, an amount which is equivalent
to such percentage of the royalty paid in terms of the Second Schedule, not exceeding one-
third of such royalty, as may be prescribed by the Central Government.
(6)The holder of a mining lease granted before the date of commencement of the
Mines and Minerals (Development and Regulation) Amendment Act, 2015, shall, in addition
to the royalty, pay to the District Mineral Foundation of the district in which the mining
operations are carried on, an amount not exceeding the royalty paid in terms of the Second
Schedule in such manner and subject to the categorisation of the mining leases and the
amounts payable by the various categories of lease holders, as may be prescribed by the
Central Government.
9C.(1) The Central Government shall, by notification, establish a Trust, as a non-profit
body, to be called the National Mineral Exploration Trust.
* * * * *
10A.(1) * * * * *
(2)Without prejudice to sub-section ( 1), the following shall remain eligible on and
from the date of commencement of the Mines and Minerals (Development and Regulation)
Amendment Act, 2015: —
(a)applications received under section 11A of this Act;
(b)where before the commencement of the Mines and Minerals (Development
and Regulation) Amendment Act, 2015 a reconnaissance permit or prospecting licence
has been granted in respect of any land for any mineral, the permit holder or the
licensee shall have a right for obtaining a prospecting licence followed by a mining
lease, or a mining lease, as the case may be, in respect of that mineral in that land, if the
State Government is satisfied that the permit holder or the licensee, as the case may
be,—
(i)has undertaken reconnaissance operations or prospecting operations,
as the case may be, to establish the existence of mineral contents in such land in
accordance with such parameters as may be prescribed by the Central
Government;
(ii) has not committed any breach of the terms and conditions of the
reconnaissance permit or the prospecting licence;
(iii) has not become ineligible under the provisions of this Act; and
(iv) has not failed to apply for grant of prospecting licence or mining lease,
as the case may be, within a period of three months after the expiry of
reconnaissance permit or prospecting licence, as the case may be, or within such
further period not exceeding six months as may be extended by the State
Government;
* * * * *
10B.(1) The provisions of this section shall not be applicable to cases covered by
SECTION Section 6

Untitled Section

5.In section 4A of the principal Act, in sub-section (4),—
(i)for the words “mining operations” wherever they occur, the words “production
and dispatch” shall be substituted;
Amendment
of section 3.
18 of 2013.
Amendment
of section 4.
Amendment
of section 4A.
35 of 1952.
37 of 2020.
5
10
15
20
25
30
35
40
45
3
(ii) for the first, second, third and fourth provisos, the following provisos shall
be substituted, namely:-—
“Provided that the State Government may, on an application made by the
holder of such lease before it lapses and on being satisfied that it shall not be
possible for the holder of the lease to undertake production and dispatch or to
continue such production and dispatch for reasons beyond his control, make an
order, within a period of three months from the date of receipt of such application,
to extend the period of two years by a further period not exceeding one year and
such extension shall not be granted for more than once during the entire period
of lease:
Provided further that such lease shall lapse on failure to undertake
production and dispatch or having commenced the production and dispatch
fails to continue the same before the end of such extended period.”.
SECTION Section 60

Untitled Section

section 10A or section 17A or to minerals specified in Part A or Part B of the First Schedule or
to land in respect of which the minerals do not vest in the Government.
* * * * *
(3)In areas where the existence of mineral contents of any notified mineral is established
in the manner prescribed by the Central Government, the State Government shall notify such
National
Mineral
Exploration
Trust.
10 of 2015.
Rights of
existing
concession
holders and
applicants.
10 of 2015.
10 of 2015.
10 of 2015.
Grant of
mining lease
in respect of
notified
minerals
through
auction.
19
areas for grant of mining leases for such notified mineral, the terms and conditions subject to
which such mining leases shall be granted, and any other relevant conditions, in such
manner as may be prescribed by the Central Government.
(4)For the purpose of granting a mining lease in respect of any notified mineral in such
notified area, the State Government shall select, through auction by a method of competitive
bidding, including e-auction, an applicant who fulfils the eligibility conditions as specified in
this Act.
* * * * *
(6)Without prejudice to the generality of sub-section ( 5), the Central Government
shall, if it is of the opinion that it is necessary and expedient to do so, prescribe terms and
conditions, procedure and bidding parameters in respect of categories of minerals, size and
area of mineral deposits and a State or States, subject to which the auction shall be conducted:
Provided that the terms and conditions may include the reservation of any particular
mine or mines for a particular end-use and subject to such condition which allow only such
eligible end users to participate in the auction.
* * * * *
10C.(1) Non-exclusive reconnaissance permits may be granted in respect of any
notified mineral or non-notified mineral or a group of specified minerals, other than minerals
specified in Part A or Part B of the First Schedule, subject to such terms and conditions as
may be prescribed by the Central Government.
(2)The holder of such non-exclusive reconnaissance permit shall not be entitled to
make any claim for the grant of any prospecting licence-cum-mining lease or a mining lease:
Provided that the holder of non-exclusive reconnaissance permit who carries out the
prescribed level of exploration in respect of deep seated minerals or such minerals as may be
notified by the Central Government, may submit an application to the State Government for
the grant of any prospecting licence-cum-mining lease as per the procedure laid down under
SECTION Section 61

Untitled Section

section 11 or a mining lease as per the procedure laid down under section 10B and with a view
to increase the reconnaissance and prospecting operations of such minerals, the Central
Government shall prescribe such procedure, including the bidding parameters for selection
of such holders.
Explanation.—For the purposes of this sub-section, the expression “deep seated
minerals” means such minerals which occur at a depth of more than three hundred meters
from the surface of land with poor surface manifestations.
SECTION Section 62

Untitled Section

11.(1) The provisions of this section shall not be applicable to cases covered by
SECTION Section 63

Untitled Section

section 10A or section 17A or to minerals specified in Part A or Part B of the First Schedule or
to land in respect of which minerals do not vest in the Government.
* * * * *
(4)The State Government shall notify the areas in which prospecting licence-cum-
mining leases shall be granted for any minerals other than notified minerals, the terms and
conditions subject to which such prospecting licence-cum-mining leases shall be granted,
and any other relevant conditions, in such manner as may be prescribed by the Central
Government.
(5)For the purpose of granting prospecting licence-cum-mining leases, the State
Government shall select, through auction by method of competitive bidding, including
e-auction, an applicant who fulfils the eligibility conditions as specified in this Act.
* * * * *
Grant of non-
exclusive
reconnaissance
permits.
Grant of
prospecting
licence-cum-
mining lease
through
auction in
respect of
minerals other
than notified
minerals.
20
(10)A holder of a prospecting licence-cum-mining lease, who completes the prospecting
operation as laid down in sub-section (9) and establishes the existence of mineral contents
in the area in conformity with such parameters as may be prescribed for this purpose by the
Central Government, shall be required to apply for a mining lease for such area and shall have
the right to get the mining lease and thereafter undertake mining operations in accordance
with the provisions of this Act.
* * * * *
12A.(1) * * * * *
(2)A holder of a mining lease or a prospecting licence-cum-mining lease granted in
accordance with the procedure laid down in section 10B or section 11 may, with the previous
approval of the State Government, transfer his mining lease or prospecting licence-cum-
mining lease, as the case may be, in such manner as may be prescribed by the Central
Government, to any person eligible to hold such mining lease or prospecting licence-cum-
mining lease in accordance with the provisions of this Act and the rules made thereunder.
* * * * *
(6)The transfer of mineral concessions shall be allowed only for concessions which
are granted through auction:
Provided that where a mining lease has been granted otherwise than through auction
and where mineral from such mining lease is being used for captive purpose, such mining
lease may be permitted to be transferred subject to compliance of such terms and conditions
and payment of such amount or such amount or transfer charges as may be prescribed.
Explanation.—For the purposes of this proviso, the expression “used for captive
purpose” shall mean the use of the entire quantity of mineral extracted from the mining lease
in a manufacturing unit owned by the lessee.
SECTION Section 64

Untitled Section

CHAPTER IV
R
ULES FOR REGULATING THE GRANT OF PROSPECTING LICENCES AND MINING LEASES
SECTION Section 65

Untitled Section

13.(1) The Central Government may, by notification in the Official Gazette, make rules
for regulating the grant of reconnaissance permits, prospecting licences and mining leases in
respect of minerals and for purposes connected therewith.
(2)In particular, and without prejudice to the generality of the foregoing power, such
rules may provide for all or any of the following matters, namely:—
* * * * *
(qqh) the terms and conditions for grant of non-exclusive reconnaissance permits
under sub-section (1) of section 10C;
* * * * *
(qqk) the amount to be payable by a Government company or corporation, or a
joint venture for grant of mining lease under sub-section (2C) of section 17A; and
(r)any other matter which is to be, or may be, prescribed under this Act.
* * * * *
17A.(1) * * * * *
(2A) Where in exercise of the powers conferred by sub-section (1A) or sub-section (2),
the Central Government or the State Government, as the case may be, reserves any area for
undertaking prospecting or mining operations, the State Government shall grant prospecting
licence or mining lease, as the case may be, in respect of such area to such Government
company or corporation:
Power of
Central
Government
to make rules
in respect of
minerals.
Reservation
of areas for
purposes of
conservation.
Transfer of
mineral
concessions.
21
Provided that in respect of any mineral specified in Part B of the First Schedule, the
State Government shall grant the prospecting licence or mining lease, as the case may be,
only after obtaining the previous approval of the Central Government.
* * * * *
(2C) A mining lease granted to a Government company or corporation, or a joint
venture, referred to in sub-sections ( 2A) and ( 2B), shall be granted on payment of such
amount as may be prescribed by the Central Government.
* * * * *
SECTION Section 66

Untitled Section

21.(1) * * * * *
(6)Notwithstanding anything contained in the Code of Criminal Procedure, 1973, an
offence under sub-section (1) shall be cognizable.
* * * * *
2 of 1974.
Penalties.
LOK SABHA
————
A
BILL
further to amend the Mines and Minerals (Development and Regulation) Act, 1957.
————
(Shri Pralhad Joshi, Minister of Parliamentary Affairs, Coal and Mines)
MGIPMRND—1586LS(S3)—11-03-2021.
SECTION Section 7

Untitled Section

6.In section 5 of the principal Act, in sub-section ( 1), after the second proviso, the
following proviso shall be inserted, namely:—
“Provided also that the composite licence or mining lease shall not be granted
for an area to any person other than the Government, Government company or
corporation, in respect of any minerals specified in Part B of the First Schedule where
the grade of such mineral in such area is equal to or above such threshold value as may
be notified by the Central Government.”.
SECTION Section 8

Untitled Section

7.In section 8 of the principal Act, after sub-section (3), the following sub-sections
shall be inserted, namely:—
“(4) Notwithstanding anything contained in this section, in case of Government
companies or corporations, the period of mining leases including the existing mining
leases, shall be such as may be prescribed by the Central Government:
Provided that the period of mining leases, other than the mining leases granted
through auction, shall be extended on payment of such additional amount as specified
in the Fifth Schedule:
Provided further that the Central Government may, by notification in the Official
Gazette and for reasons to be recorded in writing, amend the Fifth Schedule so as to
modify the entries mentioned therein in the said Schedule with effect from such date as
may be specified in the said notification.
(5)Any lessee may, where coal or lignite is used for captive purpose, sell such
coal or lignite up to fifty per cent. of the total coal or lignite produced in a year after
meeting the requirement of the end use plant linked with the mine in such manner as
may be prescribed by the Central Government and on payment of such additional
amount as specified in the Sixth Schedule:
Provided that the Central Government may, by notification in the Official Gazette
and for the reasons to be recorded in writing, increase the said percentage of coal or
lignite that may be sold by a Government company or corporation:
Provided further that the sale of coal shall not be allowed from the coal mines
allotted to a company or corporation that has been awarded a power project on the
basis of competitive bid for tariff (including Ultra Mega Power Projects):
Provided also that the Central Government may, by notification in the Official
Gazette and for reasons to be recorded in writing, amend the Sixth Schedule so as to
modify the entries mentioned therein with effect from such date as may be specified in
the said notification.”.
Amendment
of section 5.
Amendment
of section 8.
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25
30
35
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SECTION Section 9

Untitled Section

8.In section 8A of the principal Act,—
(a)after sub-section (7), the following sub-section shall be inserted, namely:—
“(7A) Any lessee may, where mineral is used for captive purpose, sell
mineral up to fifty per cent. of the total mineral produced in a year after meeting
the requirement of the end use plant linked with the mine in such manner as may
be prescribed by the Central Government and on payment of such additional
amount as specified in the Sixth Schedule:
Provided that the Central Government may, by notification in the Official
Gazette and for the reasons to be recorded in writing, increase the said percentage
of mineral that may be sold by a Government company or corporation:
Provided further that the Central Government may, by notification in the
Official Gazette and for reasons to be recorded in writing, amend the Sixth Schedule
so as to modify the entries mentioned therein with effect from such date as may
be specified in the said notification.”;
(b)in sub-section (8), the following provisos shall be inserted, namely:-—
“Provided that the period of mining leases, other than the mining leases
granted through auction, shall be extended on payment of such additional amount
as specified in the Fifth Schedule:
Provided further that the Central Government may, by notification in the
Official Gazette and for reasons to be recorded in writing, amend the Fifth Schedule
so as to modify the entries mentioned therein with effect from such date as may
be specified in the said notification.
Explanation.—For the removal of doubts, it is hereby clarified that all
such Government companies or corporations whose mining lease has been
extended after the commencement of the Mines and Minerals (Development and
Regulation) Amendment Act, 2015, shall also pay such additional amount as
specified in the Fifth Schedule for the mineral produced after the commencement
of the Mines and Minerals (Development and Regulation) Amendment
Act, 2021.”.