MINERAL CONCESSION RULES, 1960

CHAPTER VIII

Miscellaneous

56. Power to rectify apparent mistakes. – Any clerical or arithmetical mistakes in any order passed by the government or any other authority or officer under these rules and any error arising therein from accidental slip or omission, may, within two years from the date of the order, be corrected by the Government, authority or officer, as the case may be :

Provided that no order prejudicial to any person shall be passed unless he has been given a reasonable opportunity for stating his case.

57. Copies of permits, licences and leases and annual returns to be supplied to Government. – (1) A copy of every [reconnaissance permit, prospecting licence and mining lease] granted or renewed under these rules shall be supplied by each State Government within two months of such grant or renewal to the Controller General, Indian Bureau of Mines and the [Director General, Mines Safety].

(2) A consolidated annual return of all [reconnaissance permits, prospecting licences and mining leases] granted or renewed under these rules shall also be supplied by each State Government to the Controller General, Indian Bureau of Mines in such form as may be specified by him, not later than the 30th of June following the year to which the return relates. A copy of such return shall also be supplied by the State Government to [Director General, Mines Safety] at the same time.

(3) Every State Government shall send copies of all returns received by it under sub-rule (1) of rule 19 and clause (i) of sub-rule (1) of rule 27 to the Controller General, Indian Bureau of Mines .

58. Reservation of areas for exploitation in the public sector, etc. – Omitted.

59. Availability of area for regrant to be notified. – [(1) No area –

which was previously held or which is being held under a reconnaissance permit or a prospecting licence or a mining lease; or

which has been reserved by the Government or any local authority for any purpose other than mining; or

in respect of which the order granting a permit or licence or lease has been revoked under sub-rule (1) of rule 7A or sub-rule(1) of rule15 or sub-rule(1) of rule 31, as the case may be; or

in respect of which a notification has been issued under the sub-section (2) or sub-section (4) of Section 17; or

which has been reserved by the State Government under Section 17A of the Act

shall be available for grant unless –

(i) an entry to the effect that the area is available for grant is made in the register referred to in sub-rule (2) of rule 7D or sub-rule (2) of rule 21 or sub-rule (2) of rule 40 as the case may be; and

(ii) the availability of the area for grant is notified in the Official Gazette and specifying a date (being a date not earlier than thirty days from the date of the publication of such notification in the Official Gazette) from which such area shall be available for grant:

Provided that nothing in this rule shall apply to the renewal of a lease in favour of the original lessee or his legal heirs notwithstanding the fact that the lease has already expired:

Provided further that where an area reserved under rule 58 or under section 17A of the Act is proposed to be granted to a Government Company, no notification under clause (ii) shall be required to be issued:

Provided also that where an area held under a reconnaissance permit or a prospecting licence, as the case may be, is granted in terms of sub-section(1) of section 11, no notification under clause (ii) shall be required to be issued.].

(2) The Central Government may, for reasons to be recorded in writing, relax the provisions of sub-rule (1) in any special case.

60. Premature applications. – Application for the grant of a [reconnaissance permit, prospecting licence or mining lease] in respect of areas whose availability for grant is required to be notified under rule 59 shall, if -

(a) no notification has been issued, under that rule ; or

[(b) where any such notification has been issued, the period specified in the notification has not expired, shall be deemed to be premature and shall not be entertained.].

[61. Lessor to supply certain information to the lessee. – Where any area has previously been held under a reconnaissance permit or prospecting licence or mining lease, the person who was granted such permit or licence or lease shall make available to the new permit holder or licensee or lessee the original or certified copies of all plans of abandoned workings in that area and in a belt preferably 60 metres surrounding it.].

62. Change of name, nationality, etc to be intimated. – (1) An applicant for, or the holder of a [reconnaissance permit, a prospecting licence or a mining lease] shall intimate to the State Government within sixty days any change that may take place in his name, nationality or other particulars mentioned in the relevant Forms .

[(2) If the holder of a reconnaissance permit or a prospecting licence or a mining lease fails, without sufficient cause, to furnish the information referred to in sub-rule(1), the State Government may determine the reconnaissance permit or prospecting licence or mining lease, as the case may be:

Provided that no such order shall be made without giving the permit holder or the licensee or the lessee, as the case may be, a reasonable opportunity of stating his case.].

63. Previous approval of the Central Government to be obtained through State Government. – Where in any case previous approval of the Central Government is required under the Act or these rules, the application for such approval shall be made to the Central Government through the State Government .

63A. The State Government shall dispose of the application for grant of reconnaissance permit, prospecting license or mining lease in the following period:

a)     Reconnaissance Permit – within six months from the date of receipt of the application for reconnaissance permit under rule 4A.

b)     Prospecting License-within nine months from the date of receipt of the application for prospecting license under rule 10.

c)      Mining Lease-within twelve months from the date of receipt of the application for mining lease under rule 22:

Provided that the aforesaid periods shall be applicable only if the application for reconnaissance permit, prospecting license or mining lease, as the case may be, is complete in all respects;

Provided further that the disposal by the State Government in case of minerals listed in the First Schedule to the Act shall mean either recommendation to the Central Government for grant of the mineral concession, or refusal to grant the mineral concession by the State Government under rule 5 for reconnaissance permit, rule 12 for prospecting license and rule 26 for mining lease, and in all other cases, disposal shall mean either intimation regarding grant of precise area, or refusal to grant the mineral concession under rule 5 for reconnaissance permit, rule 12 for prospecting license and rule 26 for mining lease;

Provided also that in case the State Government is not able to dispose of the application for grant of reconnaissance permit, prospecting license or mining lease within the period as specified above, the reasons for the delay shall be given in writing;

64. How the fees and deposit to be made. – Any amount payable under the Act or these rules except that payable in respect of revision petition under sub-rule (1) of rule 54, shall be paid in such manner as the State Government may specify in this behalf .

64A. The State Government may, without prejudice to the provisions contained in the Act or any other rule in these rules, charge simple interest at the rate of twenty four percent per annum on any rent, royalty or fee other than the fee payable under sub-rule (1) of rule 54 or other sum due to that Government under the Act or these rules or under the terms and conditions of any prospecting licence or mining lease from the sixtieth day of the expiry of the date fixed by that Government for payment of such royalty, rent, fee or other sum and until payment of such royalty, rent, fee or other sum is made.

64B. Charging of Royalty in case of minerals subjected to processing:-

(1)   In case of processing of run-of-mine mineral is carried out within the leased area, then royalty shall be chargeable on the processed mineral removed from the leased area.

(2)   In case run-of mine mineral is removed from the leased area to a processing plant which is located outside the leased area, then, royalty shall be chargeable on the unprocessed run-of-mine mineral and not on the processed product.

64C. Royalty on tailings or rejects:- On removal of tailings or rejects from the leased area for dumping and not for sale or consumption, outside leased area such tailings or rejects shall not be liable for payment of royalty:

            Provided that in case so dumped tailings or rejects are used for sale or consumption on any later date after the date of such dumping, then, such tailings or rejects shall be liable for payment of royalty.

64D. Guidelines for computing royalty on minerals on ad valorem basis:- Every mine owner, his agent, manager, employee, contractor or sub-lessee shall follow the following Guidelines for computation of the amount of royalty on minerals where the royalty is charged on ad valorem basis, namely:-

 

 

 

 

 

Guidelines:

 

The Guidelines for calculation of royalty in typical cases are as follows, namely:-

        Case 1:     All non atomic and non fuel minerals and minerals other than aluminium, primary gold, silver, copper, lead, zinc, nickel and tin –

The Indian Bureau of Mines publishes ‘Monthly Statistics of Mineral Production’ which contains state-wise total value of each mineral produced during a month in a State. The State-wise average value for different individual minerals as published by Indian Bureau of mines in the ‘Monthly Statistics of Mineral Production’ shall be the bench mark for computation of royalty by the concerned State Government in respect of any mineral produced any time during a month in any mine in that State. For the purpose of computation of royalty the State Government shall add twenty per cent to this bench mark value. This value shall be reckoned to be the sale price for the purpose of computation of royalty. Also the value of the minerals published in the latest published issue of the ‘Monthly Production’ will be deemed to be applicable for the mineral mined in the previous month, irrespective of when the royalty actually accrues. If for a particular mineral, the information for a State is not published in a particular issue, the last information available for that mineral in the State in a previous issue shall be referred, failing which the latest published information for the mineral for all India shall be referred.

Case 2. For Atomic minerals, prescribed under Atomic Energy Act, 1962(33 of 1962):

The minerals under this category include ilmenite, leucoxene, rutile and zircon obtained mainly from the beach sand deposits in the coastal states. The basis of collection of royalty shall be the actual mineral content in the beach sand mined.

(a)   In case of sale in the domestic market, the per tonne sale price of the separated mineral actually realized, less the cost of transportation from the lease boundary to point of sale as shown by the mine owners in their sale vouchers or bills or invoices shall be considered for computing ad valorem royalty. To avoid payment of taxes on royalty the mine owners in their own interest record the price and royalty separately in the sale vouchers or bills or invoices instead of indicating a composite price inclusive of royalty. In case the price, royalty and transportation cost are not shown separately it shall be assumed that the price indicated in the sale vouchers or bills or invoices is exclusive of royalty and transportation cost, and royalty shall be charged accordingly.

 

(b)   In case of direct export by mine owners the sale value for the purpose of royalty shall ordinarily be the free on board (FOB) price realized less transportation charges from the lease boundary to the port, loading and unloading charges at the port, port charges (including sampling and analysis and demurrage charges, if any), insurance charges, royalty, taxes and interest charges on loan for export. However, in case of cost insurance and freight (CIF) sales, sea freight insurance and cost of unloading at the destination port shall also be deducted from such price. For such purposes the mine owner may prepare invoices or bills indicating the free on board price or cost insurance freight price as the case may be each of the other charges separately.

 

Explanation – For the purposes of calculation of royalty in case of minerals

Produced in captive mines (other than aluminium, copper, lead zinc, tin, nickel, gold and silver) and those not actually sold, Case 1. and 2. shall be applicable.

 

Case 3 : For aluminium, primary gold, silver, copper, lead, zinc, nickel and tin -

 

The total contained metal in the ore produced during the period for which the royalty is computed and reported in the statutory returns under Mineral Conservation and Development Rules, 1988 or recorded in the books of the mine owners shall be considered for the purposes of computing the royalty in the first place and then the royalty shall be computed as the percentage of the average metal prices in the London Metal Exchange (hereinafter referred to as the LME) for copper, lead, zinc, nickel, silver and tin and London bullion Market Association price (commonly known as London price) for gold during the period of computation of royalty. The foreign exchange rate for conversion of rupee shall be the selling rate on the date of the period of computation as published in newspaper namely, The Economic Times. For the LME prices as well as for London price of the commodity, either of the following three sources shall be referred to, namely:-

(i)                  Non-ferrous Report : Minerals and Metals Review,

28/30, Anantwadi,

P.O.Box.2749,

Mumbai-400002

 

(ii)                Metal Bulletin

16, Lower Marsh,

London, SE-17 RJ

 

(iii)               World Metal Statistics; (Monthly or Quarterly Summary),

By World Bureau of Metal Statistics,

27a High Street, Ware,

Herts SG12 9BA,

United Kingdom

 

Case 4: For by-product gold and silver –

 

            The guidelines for computation of ad valorem royalty shall be linked to the total quantity of metal produced and the LME price for silver and London Bullion Market Association price (commonly known as London price) for gold as in the case 3 above. However, in this case, the actual final production of the metal shall be considered instead of the metal content in the ore produced for the purposes of computing royalty.

 

65. Facilities for training of students. – (1) Every owner, agent or manager of a mine shall permit students of mining and geological institutions approved by the Central Government to acquire practical training of the mines and plans operated by them and provide all necessary facilities required for the training of such students.

(2) Application for training from students of institutions teaching mining or geology should be forwarded to the owner, agent or manager of a mine through the Principal or Head of the Institution. Cases of refusal to provide facilities for practical training by any owner, agent or manager of a mine should be referred to the Controller General, Indian Bureau of Mines.

66. Geophysical data to be supplied to the Geological Survey of India and the Department of Atomic Energy. – (1) A [permit holder or licensee or lessee] shall furnish -

(a) all geophysical data relating to prospecting/ mining fields or engineering and ground water surveys, such as anomaly maps, sections, plans, structures, contour maps, logging collecting by him during the course of [reconnaissance or prospecting or mining] operations to the Director General, Geological Survey of India, Calcutta and the Director of Geology and Mining of the State in which the [reconnaissance or prospecting or mining] operations are carried on.

(b) all information pertaining to investigations of atomic minerals collected by him during the course of [reconnaissance or prospecting or mining] operations to the [Director, Atomic Minerals Directorate for Exploration and Research, Hyderabad] and to the Director of Geology and Mining of the State, in which the [reconnaissance or prospecting or mining] operations are carried on.

(2) Data or information referred to in sub-rule (1) shall be furnished every year reckoned from the date of commencement of the period of the [reconnaissance permit or prospecting licence or mining] lease.

66A.(1) Notwithstanding anything contained in the Rules, the holder of a prospecting licence or mining lease for a mineral other than a minor mineral shall be free to undertake prospecting/ mining operations also in respect of the atomic minerals, in the area held by him on the conditions that :

(i) if in the course of prospecting / mining operations, he discovers any atomic mineral/minerals, he shall within sixty days from the date of discovery of such minerals report the fact of such discovery to the Director, [Atomic Minerals Directorate for Exploration and Research, Hyderabad] and the Director of Geology and Mining of the State in which the prospecting or mining operations are carried on .

[(ii) that the quantities of atomic minerals recovered incidental to such prospecting or mining operations shall be collected and stacked separately and a report to that effect sent to the Secretary, Department of Atomic Energy, Mumbai and the Director, Atomic Minerals Directorate for Exploration and Research, Hyderabad every three months for such further action by the licensee or lessee as may be directed by the Atomic Minerals Directorate for Exploration and Research or the Department of Atomic Energy].

[(2) The licensee or lessee referred to in sub-rule(1) shall be free to remove and dispose of any quantity of atomic minerals, on obtaining a licence for that purpose from the Department of Atomic Energy and on payment of royalty to the State Government];

[(3) The licensee or lessee referred to in sub-rule (1) shall, within the period referred to therein, apply to the Secretary, Department of Atomic Energy, Mumbai, through the State Government, for grant of a licence to handle the said atomic minerals under the provisions of the Atomic Energy Act, 1962 (33 of 1962):

Provided that if in the opinion of the Department of Atomic Energy the atomic mineral/minerals recovered incidentally to such prospecting/mining operations is not of economically exploitable grade or the quantity found is insignificant, it may advise the State Government to exempt the licensee/lessee from obtaining a separate licence/lease for/or inclusion of the atomic minerals under these Rules.];

(4) The provisions of clause (ii) of sub-rule (1) of rule 14 and clause (b) of sub-rule (1) of rule 27 shall not apply in relation to atomic minerals .

[(5) For the purpose of rule 66(1)(b) and this rule, ‘atomic minerals’ means the minerals listed in Part B of the First Schedule to the Act.].

67. Lease period. – Where more than one mineral is found in an area and lease is granted for exploiting two or more minerals, the period of lease for all minerals shall be co-terminus with that for which the first lease was originally granted .

68. Repeal. – On the commencement of these rules, the Mineral Concession Rules, 1949, shall cease to be in force, except as regards things, done or omitted to be done before such commencement.