Short Notes on MMDR Act, 1957

Here's a comprehensive set of notes on Chapter I (Preliminary) and Chapter II (General Restrictions on Undertaking Prospecting and Mining Operations) of the MMDR Act, 1957, including key amendments up to the 2021 amendment.

The Mines and Minerals (Development and Regulation) Act, 1957

The Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), provides the regulatory framework for the mining and mineral industry in India. It controls the mining sector under the Union and ensures a balanced approach to mineral development and conservation, with specific guidelines for prospecting, mining leases, and management of minerals.

Chapter I: Preliminary

1. Title, Extent, and Commencement (Section 1)

  • Short Title: The Act is officially titled "The Mines and Minerals (Development and Regulation) Act, 1957."
  • Extent: It applies to the whole of India.
  • Commencement: The Act came into force on a date set by the Central Government through a notification. (01.06.1958)

2. Declaration as to Union Control (Section 2)

  • The Act declares that the Union will control the regulation of mines and the development of minerals across India.
  • This declaration is intended to ensure uniformity in mineral management due to its significance to national economic interests.

3. Definitions (Section 3)

  • This section defines key terms in the Act:
    • Mineral: Any naturally occurring substance obtained from earth, including minor minerals, which are specified separately.
    • Mining Lease: A lease granted for carrying out mining operations.
    • Minor Minerals: Includes stones, gravel, clay, and sand, commonly used in construction; defined by the government for regulatory convenience.
    • Reconnaissance Permit: Allows preliminary survey activities for locating minerals.
    • Prospecting License: Grants permission for exploration and verification of mineral deposits.

Chapter II: General Restrictions on Undertaking Prospecting and Mining Operations

1. Requirement for License or Lease (Section 4)

  • No person can engage in reconnaissance, prospecting, or mining activities without obtaining the appropriate license, permit, or lease.
  • Government bodies, such as the Geological Survey of India and the Indian Bureau of Mines, are authorized to carry out these activities without requiring separate permits.

2. Amendments and Exceptions (2021 Amendment)

  • The 2021 amendment clarified that private companies, in addition to government bodies, can be authorized to conduct reconnaissance activities in specified areas to improve exploration efficiency and increase mineral output.

3. Termination of Prospecting Licenses or Mining Leases (Section 4A)

  • Termination Conditions: The Central Government can request State Government the premature termination of a mining lease or prospecting license if it is necessary for environmental protection, public health, conservation, or other public interest reasons.
  • Conditions for Lease Lapse: If a leaseholder fails to commence production and dispatch within 1 year (as amended in 2021) from the lease execution date, the lease will lapse automatically. However, an extension of up to one year may be granted if the leaseholder provides valid reasons for the delay.

4. Conditions for Efficient Production (Section 4B)

  • The 2021 amendment introduced this section, empowering the Central Government to prescribe conditions for leaseholders to ensure continuous production and optimal resource utilization.
  • This measure is intended to prevent underutilization of resources and ensure that mineral production meets national demands.

5. Restrictions on the Grant of Licenses and Leases (Section 5)

  • Eligibility: Only Indian nationals or companies registered in India are eligible to obtain mining licenses or leases.
  • Approval Requirements: Certain minerals listed in the First Schedule (such as atomic minerals, coal, and lignite) require prior approval from the Central Government.
  • Recent Changes: Amendments in 2021 specified that composite licenses (for both prospecting and mining) can only be granted to government entities in certain cases for strategic minerals or in areas with high mineral content.

6. Area Limits for Licenses and Leases (Section 6)

  • Prospecting Licenses: Limited to 25 square kilometers for a single person.
  • Reconnaissance Permits: Limited to a total area of 10,000 square kilometers (with individual permits capped at 5,000 square kilometers).
  • Mining Leases: Limited to 10 square kilometers.
  • Amendments: The Central Government can increase these limits if deemed necessary for specific minerals or mineralized zones.

7. Lease Duration and Renewal (Sections 7 and 8)

  • Prospecting License: Initially granted for up to 3 years, with renewals allowed up to a maximum of 5 years (3+2).
  • Mining Lease Duration:
    • For most minerals, leases are granted for a period not exceeding 30 years and not less than 20 years.
    • Government-owned entities may have extended lease durations as specified by the Central Government.
    • The 2015 amendment fixed a standard lease period of 50 years for newly granted leases. After this period, the lease must be auctioned.
  • Extensions for Captive Mining Leases: The 2021 amendment allows captive leaseholders to extend their lease up to March 2030 (for non-coal leases) if they continue to meet all lease conditions.

8. Provisions for Period and Transfer of Statutory Clearances (Section 8B)

  • Automatic Transfer: The 2021 amendment introduced provisions for transferring valid approvals, licenses, and clearances to a new lessee upon auctioning of a lapsed or expired lease. This was aimed at reducing delays caused by regulatory approvals.
  • Temporary Leases for Government Companies: If a lease cannot be auctioned immediately after its lapse, a temporary lease of up to 10 years may be granted to a government entity until a new lessee is identified through auction.

9. Royalty and Dead Rent (Sections 9 and 9A)

  • Royalty Payments (9): Leaseholders must pay a royalty to the state government based on the type and amount of minerals extracted. The rates are specified in the Second Schedule of the Act. CG can increase the rates not more than once in four years.
  • Dead Rent (9A): Leaseholders must also pay an annual fixed amount (dead rent), regardless of mineral production levels. This amount is specified in the Third Schedule.
  • Amendments: The 2021 amendment emphasized that royalty rates must be revised periodically, with limits on how frequently increases can occur (every four years).

10. District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET) (Sections 9B and 9C)

  • DMF (9B): Established by the 2015 amendment, the DMF aims to benefit districts affected by mining. Leaseholders must contribute a portion of their royalties to this fund (not exceeding 1/3rd of royalty), which is used for local development projects.
  • NMET (9C): Also established in 2015, the NMET funds mineral exploration projects. Leaseholders must pay 2% of their royalty payments toward this trust.

Key Points for Examination

  1. Union Control: The MMDR Act prioritizes central oversight of mineral development and resource management to ensure national uniformity.
  2. License and Lease Requirements: Strict regulations mandate that mining, prospecting, or reconnaissance operations can only occur with an appropriate permit or license.
  3. Eligibility and Restrictions: Only Indian nationals and registered companies are eligible for licenses, with added restrictions and central approval for certain minerals.
  4. Lease Termination and Production Requirements: Amendments in 2021 require production to start within one year, or the lease lapses.
  5. Efficiency Mandates: The 2021 amendment allows the government to enforce sustained production requirements for optimal mineral resource use.
  6. DMF and NMET: Contributions to DMF and NMET support local development in mining-affected areas and enhance mineral exploration.
  7. Clearance Transfers: Statutory clearances can now be transferred to new lessees, reducing procedural delays and supporting uninterrupted mining operations.

These notes consolidate the core regulations and amendments related to licensing, eligibility, lease terms, efficiency requirements, royalty payments, and community benefits under the MMDR Act, 1957. 


Sections of the MMDR Act, 1957

Chapter I: Preliminary

  1. Section 1: Short Title, Extent, and Commencement

    • Specifies the title, application across India, and commencement date of the Act.

  2. Section 2: Declaration as to Union Control

    • Declares the Union’s control over the regulation and development of mines and minerals.

  3. Section 3: Definitions

    • Defines key terms like mineral, mining lease, prospecting license, reconnaissance permit, and minor minerals.

Chapter II: General Restrictions on Undertaking Prospecting and Mining Operations

  1. Section 4: Requirement for Licenses and Leases

    • Prohibits reconnaissance, prospecting, or mining without valid permits, licenses, or leases.

  2. Section 4A: Termination of Mining Leases

    • Allows termination of leases if operations harm the environment, public health, or remain inactive.

  3. Section 4B: Conditions for Efficient Production (Introduced by 2021 amendment)

    • Ensures leaseholders maintain efficient and sustainable production.

  4. Section 5: Restrictions on the Grant of Licenses and Leases

    • Specifies eligibility, requiring applicants to be Indian nationals or companies, with Central Government approval for strategic minerals.

  5. Section 6: Maximum Area Limits for Leases and Licenses

    • Limits the area for reconnaissance permits (10,000 sq. km), prospecting licenses (25 sq. km), and mining leases (10 sq. km).

  6. Section 7: Periods for Prospecting Licenses

    • Sets initial validity (up to 3 years) and renewals for prospecting licenses (up to 5 years (3+2) total).

  7. Section 8: Periods for Mining Leases

    • Sets the maximum mining lease period at 50 years, with leases to be auctioned post-expiry.

  8. Section 8A: Renewal of Mining Leases (Amended in 2015)

    • Existing leases for specified minerals extended to 50 years, with auctioning required post-expiry.

  9. Section 8B: Transfer of Statutory Clearances (Introduced by 2021 amendment)

    • Automatic transfer of valid clearances to new lessees upon auction.

Chapter III: Mineral Concessions

  1. Section 9: Royalties on Minerals

    • Requires royalty payments to the state government based on mineral type and extraction quantity.

  2. Section 9A: Dead Rent

    • Leaseholders must pay dead rent annually if mineral production does not occur.

  3. Section 9B: District Mineral Foundation (DMF)

    • A fund for the welfare of communities affected by mining operations, supported by contributions from leaseholders.

  4. Section 9C: National Mineral Exploration Trust (NMET)

    • Funds mineral exploration activities through 2% royalty contributions from leaseholders.

Here is a summary of key points from the first two chapters of the Mines and Minerals (Development and Regulation) Act, 1957, for examination preparation:

Chapter I: Preliminary

  1. Act Title and Scope:

    • Known as the Mines and Minerals (Development and Regulation) Act, 1957.
    • Extends across India and aims to regulate the development and management of mines and minerals under Union control.

  2. Union Control:

    • Emphasis on the central government's control over the regulation of mines and mineral development due to public interest.

  3. Definitions:

    • Important terms include:
      • Mining Lease: Granted for mining operations.
      • Prospecting Licence: Granted to explore mineral deposits.
      • Reconnaissance Operations: Preliminary survey for mineral location, including aerial or geophysical surveys.
      • Minor Minerals: Includes materials like building stones, sand, and gravel, defined by government notifications.

Chapter II: General Restrictions on Prospecting and Mining Operations

  1. Licensing and Leasing:

    • Mining, prospecting, or reconnaissance requires a permit, license, or lease issued as per the Act.
    • State and central bodies, like the Geological Survey of India, can carry out such operations.

  2. Termination and Lapsing of Licenses:

    • The government can terminate leases for reasons like environmental protection, public health, or conservation.
    • If no mining activity occurs within two years, the lease may lapse, with possible extensions granted upon valid reasons.

  3. Efficiency in Production:

    • Central government mandates for production continuation by leaseholders, ensuring mineral supply.

  4. Restrictions on Granting Licenses:

    • Only Indian nationals or companies are eligible.
    • Central approval required for specific minerals.
    • Prospecting licenses or leases granted based on evidence of mineral availability and a government-approved mining plan.

  5. Maximum Area Limits:

    • Limits exist on the area covered by licenses or leases:
      • Prospecting licenses: up to 25 sq km.
      • Reconnaissance permits: up to 10,000 sq km.
      • Mining leases: up to 10 sq km.

  6. Period of Grant and Renewal:

    • Prospecting licenses are initially granted for up to three years, with possible renewals.
    • Mining leases typically last 20-30 years, with renewals up to 20 years.


an enhanced summary of the Mines and Minerals (Development and Regulation) Act (MMDR Act), 1957, including recent amendments:

1. Purpose and Objectives

  • The MMDR Act, established in 1957, is a comprehensive framework for governing the development, regulation, and management of mines and minerals in India.
  • The Act aims to ensure that mineral resources are used effectively, minimizing environmental degradation and maximizing economic benefits.

2. Key Definitions

  • Mineral: Includes both major minerals (like iron ore, coal, gold) and minor minerals (like sand, clay, gravel).
  • Mining Lease: A lease granted for mining operations, allowing leaseholders to mine minerals from a specified area.
  • Prospecting License: A permit for exploring mineral deposits within a specified area.
  • Reconnaissance Permit: Allows for preliminary prospecting through surveys, mapping, and sampling.

3. Union and State Control

  • The Act grants the central government overarching control over the regulation of major minerals, while states regulate minor minerals.
  • Certain minerals, such as uranium and coal, require special clearances, and the Union government retains the authority to set policies.

4. General Restrictions and Licensing

  • Mining, prospecting, or reconnaissance operations can only be carried out under a valid permit, license, or lease.
  • The Act imposes restrictions on the size of areas that can be granted for mining, prospecting, or reconnaissance, limiting it to ensure sustainable development.
  • Central Government approval is required for mining leases involving certain key minerals, especially those with strategic and economic significance.

5. Period and Renewal of Leases

  • Leases for major minerals are typically granted for up to 30 years, with possible renewals.
  • Amendments in 2015 specified a fixed lease period of 50 years for newly granted mining leases, after which the leases must be put up for auction.

6. Key Amendments

  • 2015 Amendment: Introduced competitive auctions for mining leases to improve transparency and resource allocation, ensuring government revenue from royalties and eliminating arbitrary lease renewals.
  • 2021 Amendment: Permits private exploration companies to conduct reconnaissance operations, expedites the process for granting leases, and enables sale of unused minerals. Also mandates auctioning of leases for certain key minerals when they expire.
  • District Mineral Foundation (DMF): Established to benefit districts affected by mining activities. Mining leaseholders must contribute a portion of royalties to the DMF, which supports projects in health, education, and infrastructure.

7. Provisions for Efficiency and Sustainability

  • To ensure that leases are used efficiently, the Act prescribes that production must commence within a specified period or the lease may lapse.
  • Conservation-focused provisions allow the government to terminate licenses if mining endangers the environment, public health, or historical monuments.

8. District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET)

  • DMF: Each district affected by mining has a dedicated fund to address the impact of mining activities on local communities. Contributions to the DMF fund development projects in areas impacted by mining.
  • NMET: Established to promote regional mineral exploration. A portion of royalties (2%) from mining leases funds the NMET, which invests in exploration projects across India.

9. Penalties and Enforcement

  • The Act imposes penalties for illegal mining and non-compliance with lease terms, including fines and imprisonment.
  • State governments are empowered to prevent unauthorized mining activities, while central authorities monitor compliance with environmental and operational standards.

10. Recent Developments and Focus Areas

  • The Act now emphasizes sustainable mining, supporting projects that mitigate environmental damage.
  • Increased focus on digitization and transparency in the mining sector, with states using digital portals to manage applications and issue licenses.
  • The Act's recent changes aim to attract more investment, particularly in sectors requiring high-grade minerals for industrial and strategic uses.


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