29 April, 2015
The Mines and Minerals (Development and Regulation) Act, 2015 (‘Mines Act’) received Presidential assent on March 26, 2015, thereby repealing the Mines and Minerals (Development and Regulation) Ordinance, 2015 (the ‘Ordinance’). One key difference between the Mines Act and the Ordinance pertains to the District Mineral Foundation (‘DMF).
The Ordinance provided that every holder of a mining lease or a prospecting licence-cummining lease was required to pay the relevant DMF an amount equivalent to such percentage of royalty, not exceeding one-third of the royalty payable and as prescribed by the Central Government for undertaking mining operations. However, the Mines Act has bifurcated this amount for the existing mining lease holders and the new licensees in the following manner:
i. the holder of a mining lease or a prospecting licence-cum-mining lease granted on or after the commencement of the Mines Act is required to pay to the relevant DMF, an amount that is equivalent to such percentage of the royalty paid in terms of the Second Schedule to the Mines Act, not exceeding one-third of such royalty, as may be prescribed by the Central Government; and
ii. the holder of a mining lease granted before the date of commencement of the Mines Act is required to pay to the relevant DMF, an amount not exceeding the royalty paid in terms of the Second Schedule to the Mines Act, subject to the categorization of the mining leases and the amounts payable by the various categories of lease holders, as may be prescribed by the Central Government.
iii. These amounts are required to be paid in addition to the applicable royalty payments.
For further information, please contact:
Zia Mody, AZB & Partners
zia.mody@azbpartners.com
Abhijit Joshi, AZB & Partners
abhijit.joshi@azbpartners.com
Shuva Mandal, AZB & Partners
shuva.mandal@azbpartners.com
Samir Gandhi, AZB & Partners
samir.gandhi@azbpartners.com
Percy Billimoria, AZB & Partners
percy.billimoria@azbpartners.com
Aditya Bhat, AZB & Partners
aditya.bhat@azbpartners.com
