[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section(i)]

GOVERNMENT OF INDIA

MINISTRY OF MINES

 NOTIFICATION

New Delhi, the   25th September, 2000.

G.S.R. 743(E).- In exercise of the powers conferred by section 13 of the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957), the Central Government hereby makes the following rules further to amend the Mineral Concession Rules, 1960, namely :- 

1.          These rules may be called the Mineral Concession (Second Amendment) Rules, 2000.

 2.          They shall come into force on the date of their publication in the Official Gazette.

 3.          In the Mineral Concession Rules, 1960 (hereinafter called the Principal Rules), in rule 22, in sub-rule (4A), for the portion beginning with the words “Notwithstanding anything contained” and ending with the words and figures “Mineral Conservation and Development Rules, 1988”, the following shall be substituted, namely:-

 “Notwithstanding anything contained in sub-rule(4), the State Government shall be competent to approve mining plan of open cast mines (mines other than the underground mines) in respect of the following non-metallic or industrial minerals in their respective territorial jurisdiction, namely:-

(i)                  Agate

(ii)                 Ball Clay

(iii)                Barytes

(iv)                Calcareous Sand

(v)                 Calcite

(vi)                Chalk

(vii)               Clay (Others)

(viii)              Corundum

(ix)               Diaspore

(x)                Dolomite

(xi)               Dunite/pyroxenite

(xii)              Felsite

(xiii)             Felspar

(xiv)             Fireclay

(xv)              Fusch. Quartzite

(xvi)             Gypsum

(xvii)            Jasper

(xviii)           Kaolin

(xix)           Laterite

(xx)            Limekankar

(xxi)           Ochre

(xxii)          Pyrophyllite

(xxiii)        Quartz

(xxiv)        Quartzite

(xxv)         Sand (Others)

(xxvi)        Shale

(xxvii)       Silica Sand

(xxviii)      Slate

(xxix)        Steatite/Talc/Soapstone”;

 4.          In rule 37 of the Principal Rules, in sub-rule(2),  words and figures “subject to the conditions specified in the proviso to rule 35”,  shall be omitted.

 5.          In the Principal Rules, after rule 64A, the following rules shall be inserted, namely:-

 “64B. Charging of Royalty in case of minerals subjected to processing.- (1) In      case 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 : For minerals sold in the domestic market by the mine-owners.-

 (a)     Single stage transportation.-  In the case of single stage transportation,  the mineral is loaded once at the mine site and is despatched by road or  railway or any other means of transportation straightaway to the destination and finally unloaded at the destination.  In such cases, the sale price actually realised, less the cost of transportation and the cost of unloading at the destination as shown by the mine-owners in their sale vouchers or bills or invoices may be considered for computing ad valorem royalty.  To avoid payment of taxes on royalty, the mine owners may 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 price and royalty are not shown separately, it may be presumed that the price indicated in the sale vouchers or bills or invoices is exclusive of royalty and royalty shall be charged accordingly.

 In case of any doubt with regard to the sale price or deductions, certificate of a registered chartered accountant shall be accepted.

 In case any transaction takes place on the basis of a provisional sale voucher or invoice or bill, then, computation of royalty may be provisional subject to final settlement based on final voucher or invoice or bill.

(b)     Multi-stage transportation.- In case of multi-stage transportation,the sale price actually realised, less total costs of transportation, loading and  unloading at different points outside the lease area, insurance charges, sampling and analysis charges, royalty, taxes, cess and plot charges at different points as may be applicable, and as shown by the mine owners separately in their sale vouchers or bills or invoices shall be considered for computing ad valorem royalty. In case price and royalty are not shown separately, it shall be presumed that the price indicated in the sale vouchers or bills or invoices is exclusive of royalty and royalty shall be charged accordingly.

 In case of any doubt with regard to the sale price or deductions, certificate of a registered chartered accountant shall be accepted.           

 In case any transaction takes place on the basis of a provisional sale voucher or invoice or bill, then computation of royalty may be provisional subject to final settlement based on final voucher or invoice or bill.

 Case 2 : For minerals which are exported.-

 (a)     Direct export.- In case of direct export by mine owners, the sale values for the purpose of royalty shall ordinarily be the free on board (f.o.b.) price realised, less transportation charges from the mine to the port, loading and unloading charges outside the lease area, packing charges, 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 (c.i.f.) sales, sea freight, insurance and cost of unloading at 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, and each of the other charges, separately.

In case of any doubt with regard to the sale price or deductions, certificate of a registered chartered accountant shall be accepted.

(b)    Export after blending.-  In the case of export by the mine owner after blending,  the mine owner may have two or more mines either in one state or in different states and he may bring his run-of-mine ores from these mines to a single point, blend them according to his requirement and export the blended ore or mineral. In such cases, the total royalty on the blended material shall be computed in the manner as specified in the case 2(a) above and the royalty shall be apportioned according to the ratio of the quantities of ores drawn from different mines for blending and payment shall be made to the respective States in which the mines are located.

 In case of any doubt with regard to the sale price or deductions, certificate of a registered chartered accountant shall be accepted.

 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 last 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-400 002.

 (ii)     Metal Bulletin,

16, Lower Marsh,

London, SE-17 RJ.