Centre considers replacing 1957 mining law with comprehensive new legislation

The Centre is considering a comprehensive overhaul of the Mines and Minerals (Development and Regulation) Act, 1957, with plans to replace it with a streamlined mining law aimed at improving ease of doing business and ease of living, sources said.

The proposed overhaul is intended to modernise the legal framework governing India's mining and minerals sector, which is considered important for economic growth, future technological progress, meeting the country's strategic requirements and achieving the vision of Viksit Bharat by 2047.

The Ministry of Mines, which administers the existing law, has amended it several times to address the changing needs of the sector. However, as part of the Centre's broader effort to review regulatory frameworks across sectors, the government is now considering a more comprehensive legislative overhaul.

Inter-ministerial panel to prepare draft bill

An inter-ministerial committee, chaired by the additional secretary in the Ministry of Mines, will undertake the exercise and prepare the draft legislation, according to sources.

The panel will review the existing MMDR Act in its entirety and examine international best practices for possible incorporation into the proposed law. It will also consider emerging trends and future developments in the mining sector while drafting the bill.

The committee's mandate includes simplifying the language of the current legislation to make it easier to understand and comply with, while improving ease of living and ease of doing business.

It will also examine how the law can be aligned with related statutes and constitutional requirements. The panel is expected to recommend structural and substantive changes to improve the legislation's clarity, enforceability and administrative efficiency.

State governments and other stakeholders will be consulted before the draft bill is prepared.

Key law governing mines and minerals in India

The MMDR Act, 1957, is the principal central legislation governing the development and regulation of mines and minerals across the country.

It empowers the Union government to regulate mining and mineral development in the public interest and frame rules to ensure the conservation and systematic development of mineral resources.

The law differentiates between major and minor minerals. While the Centre regulates major minerals, minor minerals fall under the regulatory authority of state governments.

States grant mining leases under central rules

Under the existing framework, state governments grant mineral concessions, including prospecting licences and mining leases. These concessions are subject to rules and auction processes prescribed by the Centre.

The Union government also determines royalty rates, while the royalties are collected by the states from mining leaseholders.

The proposed legislation is expected to review this framework alongside other provisions of the existing law, with the stated objective of creating a more streamlined and effective regulatory system for the mining sector.